NEW DELHI: Shankar Sharma of First Global says that there is a little possibility of Sensex catching up with previous highs and markets could shed another 2500 points. He forecasted an ugly bear market in global equities in 2012.

In an interview to ET Now, Sharma said that pain for global equities is here to stay and Indian equities would track global trends.

The financial expert said that barring a few stocks there were hardly any that looked attractive at current levels. He however was bullish on ITC, HUL and Bajaj Auto. "Large caps are unlikely to diverge from broader market trend," added Sharma.

Speaking on the Rupee depreciation , Sharma said the Indian currency may see a bottom at 52 levels against USD. He also reiterated that there could be some degree of relief rally in equities after Rupee stabilises.

Sharma said that it will not be easy for the Rupee to get back to 45 levels vs USD and Rupee may remain under pressure due to weak inflows in 2012. "Small swings in currencies will hurt markets more," added Sharma.

When asked about RBI rate hikes, Sharma came down heavily on the central bankers saying, "1930s thinking of RBI is killing growth. Indian rate tightening moves were ill-conceived."

Sharma said that growth is the only way to fight inflation.

Commenting on India's GDP growth, Sharma said that he would be surprised if India's GDP comes at 7% in FY-12. The economy grew at 7.7% in the April-June quarter. The government is due to announce the GDP growth rate for the second quarter on Wednesday.

An ET survey stated that GDP growth will slump to its lowest in nine quarters to 7% in the three months to September.