The beginning of the year 2012 was characterized by the return of investor confidence in the Indian capital market.

The SENSEX is in effect, making a spectacular technical rebound of nearly 17% erasing all losses during the second half of 2011. This fall of the financial market in 2011 was the result of the sinking of important technical levels, high valuations but also an alarming decline of growth around 7 %. The Manmohan Singh government expected a growth of 10% to get out the entire country and its population of under-development.

Nevertheless, investors were quickly reassured by the economic forecasts of the World Bank which provides that the Indian economy in 2012 will reach a growth of 8.7%. Meanwhile, the Indian government announced during the month of January 2012 the opening of the Indian market to foreign capital. Thus, since January 15, investors have access for the first time to stocks listed on the Sensex. This new reform will help to attract more foreign funds and reduce financial market volatility.

This return of optimism in the Indian market will have to be confirmed during the year 2012 because the attractiveness of Indian equities is still slowed down by a weak currency and high inflation.

Technically, the dynamics of the price of the Sensex-30 remains bullish on daily data over the 17 000 points threshold coinciding with the 20-day moving average. In weekly data, the index has faced to the technical step of 17 800 very important points which the downward crossing in 2011 caused a sharp drop in the index. We will monitor the overcoming of this key level to position the purchase order to cover the return of the index towards 20,000 points in first place.