Indian shares seen topping 25,000 in 2 yrs - survey

NEW DELHI (Reuters) - India's benchmark share index should top 25,000 points in two years, up about a fourth from levels now, more than half the respondents in a survey by a leading industry body showed.

The top-30 share BSE index, which was trading at 19,911 at 0635 GMT on Monday, has gained about 45 percent since the start of January, averaging the growth in the past five years.

The benchmark has been driven by a robust economy that has expanded at an average 8.6 percent in the past four years and is likely to maintain the pace in the current fiscal year ending in March 2008.

"Sustained economic growth, combined with continued market-friendly capital market reforms should prove to be supportive factors," the Federation of Indian Chambers of Commerce and Industry (FICCI) said in the survey released on the weekend.

However, 47 percent of the respondents thought the market was overvalued, it said.

About 100 brokers, finance managers, investment bankers, mutual funds, portfolio managers, asset management companies and private equity participated in the poll, FICCI said.

Banking and engineering were the favoured sectors for a majority of the respondents, while export-focused software services, pharmaceutical and automobile sectors were forecast to underperform.

An earlier FICCI survey on business confidence had showed the Indian industry was concerned about slowing growth momentum, with a rising rupee that climbed about 12 percent this year hitting export growth and some sectors.

India's annual economic growth dipped below 9 percent for the first time in three quarters in July-September as manufacturing and exports slowed.