Indian Stock Market Predictions 2011

Indian Stock Market Predictions 2011

Recently, many readers have asked me to do Indian stock market predictions for the year 2011. Many have asked me that the Sensex is at almost 21,000 level now. So what should they do now? Weather they should continue investing in the stock market or simply stay out of the market waiting for the cooling down of the stock market?

Well, on Wednesday, 2nd November 2011, Federal Government has announced QE2 which is US $ 600 Billion of economic stimulus. Under QE2, The Federal government will print US $ 75 Billion every month after month over 2011 totaling US $ 600 Billion.

Thus, in layman’s language, more US $ 600 Billion is being created out of thin air and pushing it into the economy. And this newly printed money will enter into the emerging markets like India and China and will cause ballooning of the stock markets.

Thus, in my opinion, you will see new heights of Sensex in the year 2011. This is because all of that newly printed money into the US Economy will find its way to the Indian economy and inflate the Indian stock market.

So in my opinion, you should buy more stocks. The federal key interest rates are just 0.25% means the big banks and financial institutions in USA can borrow any amount of money from federal reserve at just 0.25% of annual interest rate and invest it in the emerging economies like India.

India will see more capital inflow during the year 2011 and this money will shoot up the Sensex. What I suggest all of you is, make the habit of watching US Monetary Base and key interest rates. The day, USA will contract its monetary base by increasing the key interest rates, the stock market of India will collapse. So you need to exit before that.

But well, next 2-3 years that day won’t come according to me. Anyways, So Invest in the Indian stock market vigorously and gain excellent returns…!!!