"We are in a bullish zone right now. FIIs have helped build this position.... The base is build and as the government comes out with more reforms, market will see new highs. The only worry is the falling rupee. I see the Sensex in the range of 22,000-24,000 over the next one year," Rajesh Jain, EVP retail research, Religare Securities said.
A new Hindu calendar year, Samvat 2069, began yesterday on the day of Diwali.
The Sensex is currently at 18,618.87 level and is about 2,587.9 points away from its record high of 21,206.77 hit in January, 2008.
As per a report by Angel Broking: "Going into FY'14, there are possibilities for further upsides with a target of 20,300 for the Sensex in next 12 months."
"The market surprised positively on the back of concrete developments such as the resolution of policy paralysis domestically and an improvement in the economic climate in the euro zone region.
There has been a significant resultant improvement in investor sentiments and I expect the markets to rally further on incremental positive developments in the coming months," Dinesh Thakkar, Chairman and Managing Director, Angel Broking said.
Market experts feel that post December 2012, the RBI may ease interest rates by 25-50 basis points.
According to market participants, optimism in the markets is due to factors such as increase in global liquidity flows, government initiated policy reform measures and improvement of growth prospects in FY'14 owing to reduction of risk scenarios panning out in the Euro zone and US.
The foreign institutional investors (FII) investment in the Indian equity market in 2012 so far stands at Rs 96,861 crore (USD 18.62 billion).
Experts said FII inflows will continue in the coming months.
According to Kishor Ostwal, CMD, CNI Research, "Nifty is likely to test 6,400, while the Sensex may touch 24,000-level in the new year."
After a year marked with huge losses, 2012 has so far been good for markets as the Sensex has gained over 20 per cent.
Indian stock market had suffered losses to the tune of about 25 per cent in 2011.