Equity Outlook
5th July, 2010
Atul Kumar - Fund Manager (Equity)
Market Musings
During the month of June 2010, the BSE Sensex rose by +5.01%. Some of the sectors which did better than the index during the month were – FMCG, Auto and Capital goods. Metals and Banking were among the prominent sectors which dragged the overall performance of the Index.
During the month of July, the Central Government hiked fuel prices – Petrol, Diesel and cooking gas. This can be seen as a step towards moving to market determined prices for oil products.
Earlier, the price of gas earned by PSU upstream companies was increased to reduce their losses. This is a bold step by the Government, given that the economy is still battling high inflation levels.
Another event at the beginning of July 2010 is shifting to Base rate by the banks. With this rate coming in, RBI has made it mandatory for banks not to lend below this rate.
Equity markets are poised to deliver good returns in the years to come. India is in a sweet spot with good economic growth going ahead, whereas most of the developed world is struggling. The current valuations of the markets are comforting and there is leg room for valuations to expand from current levels. Though, inflation still remains a major concern for the economy, which can impact interest rates and put pressure on economic growth.
Disclaimer:
The views expressed here in are the personal views of the Fund Manager. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. This document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The Sponsor, The Investment Manager, The Trustee or any of their respective directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and opinions given fair and reasonable. This information is not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. None of The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material.
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