It was yet another good trading sessions and a week too with sensex gaining 3.8% and nifty gaining 3%. The Indian markets were up today by over 404 points or 2.42% and nifty closed beyond the psychological barrier of 5000 points. The only laggards in the market were IT stocks. The markets are recovering for some time of late. But how far and how long will it still take the markets to over take its peers?? Thats a crucial question in point. Lets analyze this in detail.

Its long since the markets touched its all time high of 20873 on Jan 8th,2008. Since then we have seen the markets losing close to 30% from its peek and touching lows of 14809 last month on Mar 17th,2008. That means its a recovery of about 13%. A close analysis shows that the Asian markets like that of china, Hong Kong and Nikkei-225 are gaining the lost ground faster than sensex.

The credit crunch and subprime crisis had a bad impact on all the markets around the world and also on different sectors of the economy like banking and IT sector which are among the worst hit after the news of a slowdown in the US economy. So what is exactly stopping the Indian markets. Is it that we are much more dependent on US economy the our peers? Or are the local conditions at home not as good as it used to be some time back? Is the inflation of 7% + in the recent times a reason to this?

We need to find answers to these questions sooner than later. Lets see how long the present recovery session holds. The crude oil touching the $120 will probably the next big shock to the markets. We have to wait and watch how the game proceeds from here on.

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