Can India's stock market keep rising after its record-breaking streak or is it time for investors to bail out? It has been just two-and-half months since Mumbai's benchmark index, the Sensex, hit the historic 10,000 mark and last week it raced past 12,000.
The 30-share Sensex index took just 19 trading sessions to move up 1,000 points from 11,000. It closed at 12,030.3 on Friday, up 793.7 points or seven percent from its previous week's close of 11,237.23.
The speed of the rise has made some analysts nervous. But near-term performance is expected to depend on a slew of earnings figures due in coming weeks, analysts say.
"Expectations of the manufacturing sector performing well are high," says R. Balakrishnan, director of Parallex Consultancy Services. "If that happens, the markets are set for a good roll ahead."
"Theres a strong momentum in this market," says Kunal Kalra of Parag Parikh Financial.
Next week India's largest car company, Maruti Suzuki, reports full-year earnings along with petrochemical giant Reliance Industries.
Investors have already responded enthusiastically to profits by top software firms such as Infosys Technologies and cement giant Gujarat Ambuja.
Still, India is one of the most expensive markets in Asia on a valuations basis. But he says, valuations are still "well below the last dotcom bubble valuation of 27 times earnings in April 2000" and "this is a liquidity driven market," he says.
Overseas funds have led the rally this year, pumping in around four billion dollars into Indian equities on top of a record 10.7 billion dollars in 2005.
Foreign funds have beamed their headlights on India, betting it is going into a growth cycle akin to that of China in the 1990s.
India's economy is estimated to have expanded by 8.1 percent in the fiscal year ended March - making it the world's second fastest-growing after China's - and it is expected to grow by a similar pace this year.
Another positive factor, says Deepak Jasani, head of retail research at India's HDFC Securities, is that "India is one of the least geared economies to global growth in Asia". Exports only account for 12 percent of GPD, shielding it from global economic slowdowns, he says, compared to as much 40 percent in other countries.
And with the International Monetary Fund deeming "realistic" India's medium-term goal of growing its economy 10 percent a year if it can boost infrastructure and job creation, some analysts say India could be in the early years of a multi-year bull cycle. They point to the 18-year US bull-run between 1982 and 2000 as a model.
Still, the pace of the market's rise worries some analysts. The Sensex has taken only 10 months to gain 5,000 points.
"The recent run-up has been too sharp," says Atul Hatwar, a dealer at brokerage Crosseas Securities.
"We are bullish over the long-term but are not comfortable with valuations in the short-term," says a Societe General bank report, advising investors to book profits. One analyst warns of a big correction.
"The markets could correct up to 20 percent over the long-term," says Andrew Holland, executive vice-president DSP Merrill Lynch. "I'm not looking at any more levels. There is enough risk on the downside." But others disagree, predicting the Sensex has further to rise as India's strong growth translates into robust profits.
"The economic growth prospects is what is exciting people because this is what will flow to corporate earnings," says Astaire's Lalwani.
Last September, one of India's top investment gurus, Rakesh Jhunjhunwala, said the Sensex could touch 25,000 in the next five to six years. His forecast was greeted with disbelief. Now people are taking it more seriously.