With the recession lifting, better corporate profits and enhanced investor confidence, the Australian benchmark index is likely to rise and touch the 5300 mark according to some market analysts. And considering the fact that this is 13% more than where the stock market closed in the middle of September, this is quite an impressive gain, if however it indeed materializes. It is noteworthy that the estimated profit of the index is already 17.3 times, up from the start of the year when it was 10 times.

It increasingly seems that the analysts might have hit the right chord here because the early indicators are all positive. For example, in the benchmark index there are 168 companies and out of them, 62 companies have reported better earnings in the second half. This is much better than what the analysts believed would be the case, and naturally they are delighted. The S&P/ASX 200 index that went down on March 6^th 2009 to a 5 year low has already rebounded by as much as 49%.

These figures are sure to bring back investor confidence somewhat at least, and since many of the stocks at this time are under priced, this gives a great opportunity to invest now. Brokers and fund managers will identify them and as their prices begin to climb, this will pull up the market even more.

One concern that still haunts many investors is whether the recovery will be ‘V’ shaped or ‘W’ shaped. Because if it is ‘W’ shaped, as some people fear it might be, we might not have seen the worst yet. But in all likelihood this seems unlikely because the government has also chipped in big time to revive the economy. There have been several stimulus packages and the interest rates are currently at their lowest in 50 years. This is naturally good news for business as this makes the corporate sector more competitive. The economy is beginning to stabilize and even if the interest rates were to be increased somewhat, this might not have a negative impact on the market.

The fact is, there are many investors at this time who have a lot of money parked and nowhere to invest. They are just plain afraid of investing in the ASX out of fear that the cash may get wiped out if the market goes down. They just need some more positive news and a little bit of confidence before they are ready to pump it into the stock market. And it now seems that the time might be right for them to sit up and take notice of the good news that is coming in and the better expectations.

Popularity: 10% [?]