Is BNP Paribas extremely bullish on India?

I turned on CNBC TV18 this morning to find Manishi Raychaudhuri (MD and Head of Research, BNP Paribas Securities) talking about the Sensex and the Rupee. He expected a 10-15% correction from current levels, but also said that they've put a 21,000 target for the Sensex for the year.

While he said that fund flows would be muted in emerging markets in 2010, in the same stead, he did not rule out the possibility of a repeat of last year's flows into India. If that happens, the Sensex can shoot to 25k+, but that looks unrealistic to us, at least for now.

He also looked quite bullish on India, and said that India would be at a 20% higher P/E than the rest of Asia- and gave a year end target of 42 for the INR (rupee) versus the USD (dollar).

You can read/view the interview online on moneycontrol.com

Stockscenter view:
Putting the contradictions aside, it really makes sense to be bullish on India. India is a growing democracy- with a large consumer base, with growing purchasing power. On the other hand, many of the developed countries aren't going anywhere- the stocks moved up, yes, but that was much of an upward correction to their rational values. We're where we should be right now, and if things do not go wrong at the macro level, we should see strong gestures from the economic indicators (for India) that would push the markets upward. Downward corrections shouldn't spook one, unless they're triggered by the collapse of another major bank in the USA! Ergo, what BNP Paribus says might just be true- expect a correction, but do not let it spook you. While that's difficult, we really advise investors to stay cautious.