Optimism prevails in the Indian art market.

Though investor confidence in the art market is still a bit circumspect, the interest has certainly returned. What’s interesting is that investors/ collectors aren’t really rushing in to buy with the herd-like mentality typical of the pre-2008 phase. Those drifting back into the market appear determined to control their investment. This time they are asking the right questions, such as:

What are long-term prospects of the art market? How much should one ideally invest annually? Who can act as an impartial guide in the investing process? How is short-term liquidity situation? How to get rid of weak assets to acquire blue-chip artists? How does one enhance the value of portfolio?

Significantly, ArtTactic’s latest market confidence report gives a thumbs-up to Indian modern art, albeit remaining a tad cautious about the contemporaries. The analyst firm’s Indian Art Market Confidence Indicator has witnessed a good recovery largely been on the back of strong recovery in the secondary/ auction market for Modern Indian art. In May 2010, the Indian Art Market Confidence Survey had pointed to further recovery, with the overall Confidence Indicator increasing 26%.

The gap in confidence between the Modern and the Contemporary art market though had widened. Respondents were concerned that the fast recovery and the bounce-back in valuations would again attract speculators to the in the Modern Indian art market. Compared to 6 months ago, the market participants are feeling marginally less positive about the current Indian art market. The Current Indicator came in at 57, down from 61 in May 2010.

However, the short-term outlook, measured by the Expectation Indicator stands at 66, implied that the respondents expect a positive market development in the next 6 months. That sums up the overall optimism prevailing in the Indian art market.