23-Apr-2014 
Sensex 22,876.54 (+118.17)
Nifty 6,840.80 (+25.45)
Compare Performance Equity Sectoral Tax Planning Balanced Gilt Bond Liquid Index Pension
 Home|Contact Us
Login       
Password
 Remember my Userid
New User - Register?
Forgot Password?
Latest NAVs
 Funds Reckoner
 Scheme Profile
 Scheme Comparison
 Fund Screener
 Return Calculator
Get Holdings
 Mobilisation Trends
 Trends in Transactions
 News
 Stock Watch
 Offerings
 Dividends
 Top Holdings
 Rankings
 NFO Analysis
 Portfolio
 -Analysis
 -What's In What's Out
 Fund Managers
 -Interviews
 -Survey
 -Performance
 -From the Desk
 Special Feature
 Malegam Committee
 Report
 FAQs
 Glossary
 SEBI Investor Education  Programme
 Tutorials
From the Fund Managers Desk 1x1pix.gif (807 bytes)
1x1pix.gif (807 bytes)

Tuesday, August 10, 2010 14:20 Hrs IST

Markets Could Continue To Trade in a Band & Reward Companies and Sectors with Good Growth Visibility and High Free Cash Flows

DSP BlackRock Mutual Fund's Equity Market Views

The Indian equity markets edged up in early July to touch a 30-month high before coming off partially towards the latter half. Strong inflows pick up in monsoon and buoyant tax collections have helped the market maintain its upward trajectory.

Industrial Production (IP) growth moderated, but continues to remain strong. Strong demand and rising capacity utilization could lead to higher prices and inflationary pressures in the medium term. Monsoon, has however, seen a sharp pick up and the annual rainfall is now only 5% deficient. This should help the overall agricultural production and temper inflationary expectations. While credit growth continues to be strong, deposit growth has not kept pace. The RBI has therefore raised the key policy rates and can be expected to continue monetary tightening later in the year. Lending and deposit rates which have remained stable so far can be expected to move up.

Corporate earnings for the quarter have been mixed, with good volumes but lower than expected margins (on account of rising raw material prices) in the consumer segment and disappointing revenues but better than expected margins in the infrastructure sector. The commodities sector took a hit on both revenues as well as margins while banking saw better than expected income growth helped in part by the telecom sector lending. On the global front, US GDP growth data disappointed which might help reduce commodity prices and therefore positively impact the domestic economy.

Government reforms continue to gather pace and the fiscal situation has strengthened post the telecom auction and oil price deregulation. While global economic news, foreign fund flows and monsoon remain key variables that could influence the direction of the market in the near to medium term, inherently strong fundamentals make the country well poised to deliver 8.5%-9.0% economic growth in FY11. From a valuation perspective, though Indian equities seem to be reasonably valued, the markets could continue to trade in a band and reward companies and sectors with good growth visibility and high free cash flows.

Previous Stories
More
Other Stories
  Guide to the Markets Asia (21-Mar)
  The front end of the curve looks relatively attractive in the current situation on a risk reward framework-Navneet Munot, CIO, SBI Funds Management (9-Dec)
  Fears of an early taper in light of stronger than anticipated data last week have receded (18-Nov)
  RBI will not hesitate to increase the Repo Rate further, if the inflation remains uncomfortably higher than the RBI's own projections (30-Oct)
  We believe that the 10 year bond yield will range between 8.40%-8.80% levels (30-Oct)
  The policy review will throw light on how RBI weighs the growth-inflation trade-off (28-Oct)
  Investors should take advantage of current pessimism to get exposure to long term stories (28-Oct)
  Monsoons have been good and agricultural growth has picked up which remains a key positive going ahead-Equity Market-Deutsche Mutual Fund (23-Oct)
  The trajectory of inflation, especially the Consumer Price Index may determine further moves in the repo rate (22-Oct)
  We expect bond yields to remain range-bound with the benchmark 10Y G-sec yield trading between 8.5% to 9.0% in the near-term (22-Oct)
Next

Top