Marathon or sprint?

MUMBAI: Is the Sensex on a sprint or a marathon? The markets have already sprinted to the 14K-plus mark. But what do market experts foresee? Are they readying for another dash or a tough climb?

“From here, I see a series of short sprints. It’ll be like a 4x100-metre relay, with sectors passing the baton to one another. Select mid-caps will outperform the market,” says Harshad Apte, assistant vice-president, India Infoline.

“It’ll be a marathon because sprints tend to get terminated very early. The Sensex could touch 17,000 by  2007 end,” says Vijay Bhambwani, CEO of BSPLindia.com.

“We’ll see a gradual rise because mid-caps have just started narrowing the valuation gap with large caps,” says Kunj Bansal, CIO, Religare Securities.

Sure, the runners themselves--or the marathon scrips--should have the stamina to withstand ups and downs. But they need  other qualifications as well.“Such scrips should clock a compounded annual growth rate of at least 20-25%,” says JM Morgan Stanley’s chairman, Nimesh Kampani.

“Marathon stocks are market leaders, they have top-class managements focused on consistent growth,” says Narayan SA, managing director, Kotak Securities.

“A stock needs to have seen at least two ups and downs of the market cycle, the commodity cycle, and its own business cycle, to make it to the marathon list,” says AK Sridhar, chief investment officer, UTI Mutual Fund

“To be a marathoner, the company must not only be able to last the next five years; it should also be able to adapt to the changing needs of customers,” says Anand Rathi, chairman, Anand Rathi Securities.

“The market run from here should be more like a marathon. It should either stop for a breather or run at a pace at which it doesn’t get breathless. Otherwise, it may not be able to complete the race,” says Mihir Vora, head of fund management (equities), HSBC Mutual Fund.