Sensex to gain 9 pct in 2011: Credit Suisse

Credit Suisse said the Sensex,which is now trading at 15% premium will add another 9% in 2011.

Leading global brokerage Credit Suisse India said the Sensex,which is now trading at 15 per cent premium over the 2009 levels,will add another nine per cent in 2011.

Describing the domestic market as the “most crowded” one among the emerging markets,the brokerage however said,the other emerging markets,especially Korea and Taiwan,will outperform the benchmark Sensex by offering up to 20 per cent returns considering their current lower valuations.

“The domestic is trading at a high premium of nearly 15 per cent now,though this is lower than the 20 per cent premium of early November,on the back of a record USD 29 billion foreign fund flows into the domestic equities,we see the Sensex giving a rather tepid return of 8.5-9 per cent by the end of the next calendar year,” Credit Suisse Securities India director Ashish Gupta said here while releasing Asia Equity Strategy: 2011 Outlook.

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Since the country’s economic recovery has been led by domestic consumption,we feel that export recovery in the cyclical economies of these two export-led North Asian economies of Korea and Taiwan will offer better returns in 2011. Therefore our advice and focus will be to move away from the South Asian economies to these North Asian economies,” it added.

The Sensex which had scaled past a historic 21,000 mark last month,adding nearly 20 per cent over 2009 close,still commands one of the highest premium among Asian markets as the country has received 51 per cent of the entire capital inflows into Asia,excluding China,this year,Gutpa said.

It can be noted that in 2009,the Sensex was the star performer globally with a staggering 81 per cent return.