Sensex to touch 22,100 by end of 2011 – Nomura Asia

I read this statement made by Nomura Asia. Nomura is a Japanese securities and financial company that operates globally. Why is Nomura confident for such positivity and big target (even when most of the stock broking firms are predicting flat performance in India) for Sensex?

Nomura securities officials mention that big Indian companies are becoming more and more global in their operations and focus. As the global recovery is being sighted across the developed nations after the recession in past 3 years, Indian companies with global focus would certainly benefit from this recovery. This should translate into good performance by companies and so the better financial numbers.

Now, this may boost your confidence as an investor in Indian stock markets and you may feel confident to go out and buy stocks in near future. But, such statements generally create short term interest that translates into stock price movements in upward direction and when this interest fades away after some time due to certain negative trigger, stock markets come spiraling southward crashing down.

We have just observed more than 1500 points swing in stock markets in past 10 days. This is mainly due to FII activities. Market or stock fundamentals have not changed in past 10 days that SENSEX should gain 1500 points. I guess FII’s are pouring in money to park it in anticipation of coming results season for short term gains of few percentage points. Markets went down to below 17,500 and now trading above 19,000 levels within 10 stock trading sessions.

Do not get carried away and start buying stocks right away, instead what we need to do is, to look for fundamentally good stocks to buy. The stocks should have good valuations and they should be available in market at relatively cheaper rates. Buy stocks of such companies in SIP manner in small quantities for long term investing. I believe this should prove a good strategy in such volatile times and fetch handsome investment returns in longer time duration.

I would be posting stock analysis of some of the best stocks to buy for long term, be in touch with (You are invited to suggest good stocks to buy via comment form below, I would love to analyze your suggested stocks and post my views on them here).