Market may hit 21000 soon

With a rate cut in the US and its prior expectations driving the Sensex beyond 20,000 mark, analysts expect the next thousand point milestone well before the US central bank's next rate review meeting in January.

Sensex has gained close to 450 points in the past two days and today settled above the 20,000 mark for the second consecutive day.

Wednesday's rally came on the back of a 25 basis points rate cut by US Federal Reserve last night, while marketmen said that expectation to this effect had contributed to yesterday's gain.

"The markets are going to rally from here onwards. Gain of 500 or more points is not a big thing now a days as the base of the market has increased. A level of 21,000 for Sensex and 6,500 for Nifty is quite achievable," domestic brokerage firm SMC Global vice-president Rajesh Jain said.

"Consequent to this rate cut by the Federal Reserve, there would be more liquidity in the market. However, it would be marred with volatility," Asika Stock Brokers Research Head Paras Bodhra said.

Markets have absorbed the adverse news on subprime, which was a tremendous global shock, Bodhra added.

"The Fed cut of 25 basis points is not all that bad. The markets were expecting a 50 basis points cut. But the current decision is a neutral one," Jain added.

US markets plunged after the decision that was opposed to the widely anticipated 50 basis point cut.

The Indian equity market is moving in a different orbit as against the way the Asian fraternity is progressing. Markets are showing a high level of decoupling factor, analysts added.