Sensex may move towards 21,000 by 2011

Ruchir Sharma, said that he saw a new bull market rally where the market would once again hit its highs at 21,000 on the Sensex. "I think the base for that will be set in the middle of next year or so." Sharma said he would be surprised if Sensex touches 21,000 before 2010-end, but was quick to add that the Sensex may move towards 21,000 by 2011.

In an excusive interview with CNBC-TV18 Ruchir Sharma, Head of Emerging Markets at Morgan Stanley Investment Management, Sharma said that he expected crude to be towards USD 30-40 per barrel more than being at USD 80 per barrel a year to 18 months from now as forward markets or lot of the bullish consensus tend to currently imply.

He said that the Indian markets were currently in a cyclical bull market and that he saw a real bull market only by 2011, where he said the Sensex was likely to hit 21,000. When asked what a cyclical bull market meant, he said, “A bull market means that you’re starting a new era where the highs of the old bull market are going to be taken out. Instead there is a middle path, which is what we call a cyclical bull market within a structural downtrend.” However, Sharma added that by the year end or next year, the market would come down again as the structural problems had not yet been cleared.