Economy
Majority of mutual fund managers surveyed expect the Sensex go above 21,000 after one year

Mutual Fund managers have a positive outlook towards equity market in the short-term and expect earnings growth to improve next year

 
Even though half the mutual fund mangers feel that the equity markets are undervalued and the remaining feel that the market is fairly valued, more than half of them expect the market to be up between 15%-20% after one year, according to the latest “Fund Managers Survey” by ICICI Securities. Most of the fund managers are positive on the market from a one year perspective, says the report. However, do not take the report as an industry consensus as just 12 fund managers have taken the survey. Out of the 12 managers surveyed, three feel that the Sensex would be in a range of 10%-15% after a year and two fund managers feel that the Sensex will deliver a return below 10%.
 
When asked for their outlook on the markets in the next three months, majority were bullish, whereas the rest have a neutral outlook. However, in August 2012, before any reforms were announced, just 8% were bullish of the market. The Sensex is up 9% since. The survey in August 2012 showed that majority of the fund managers felt that the market was fairly valued. However, as per the current survey, their opinion seems divided over valuations of the market, despite the fact that half of them are more bullish of the equity market compared to three months before. 
 
“Fund managers are more hopeful of better earnings growth for the next year (FY14) as compared to FY13. Total 75% of respondents expect earnings growth to be in the range of 10%-15% in FY14 as compared to 5%-10% in FY13,” mentions the report.
 
Majority of them prefer large-cap stocks to perform better in the next one year compared to mid-cap stocks. Banking and pharma sectors remain among the preferred sectors. FMCG/consumer staples and media sector also gained in preference compared to the last survey. The preference for pharma and IT sectors has reduced as compared to the previous survey.
 
As far as global factors affecting the market are concerned, the recent sharp volatility in currency has increased concerns. Global crude oil prices remain a major concern and the European sovereign debt crisis also remain a worry for the markets. The fund managers don’t feel the slow US economic recovery is a cause of concern, though 8% of the fund managers surveyed in the August 2012 felt it was a cause of concern. New global concerns stated as compared to the last survey are that of the political tension in Middle East and the China slowdown. 
 

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BSE Sensex, Nifty struggle to head higher: Tuesday Closing Report

The Nifty awaits fresh signal to decide its further direction

 
The market closed with minor gains even as the Lok Sabha continued its debate on allowing FDI in multi-brand retail in the country. Today the Nifty kept up its past five day trend of making a higher low. However, the index couldn’t make a higher high although it closed near the day’s high and ended in the positive. With the weak upmove we saw the benchmark close almost flat. The National Stock Exchange (NSE) saw a volume of 84.94 crore shares and an advance-decline ratio of 1006:801.
 
The domestic market witnessed a subdued opening on the back of weak global cues. US indices closed lower overnight on disappointing factory output data and wrangling among policymakers on the issue of hike in taxes and spending cuts. Reflecting the US trend, the Asian pack was mostly in the red in morning trade on concerns in the world’s biggest economy.
 
Back home, the Nifty opened four points lower at 5,867 and the Sensex resumed trade at 19,278, down 27 points from its previous close. The market witnessed a high degree of volatility since the opening bell on nervousness about the fate of the government’s reforms as the Lok Sabha (Lower House) is expected to begin its two-discussion on the FDI issue.
 
Buying in select stock helped the benchmarks overcome initial jitters and move into the green in subsequent trade. The market stayed in the green in the remainder of the morning session. 
 
Profit booking once more pushed the indices into the negative a short while later. The benchmarks slipped to their lows in noon trade in the absence of any local triggers. At the lows the Nifty fell to 5,859 and the Sensex retracted to 19,264.
 
Meanwhile, Moody’s Investors Service on Tuesday said its outlook on the Indian banking system for the next 12-18 months remains negative, on account of the continued challenging nature of its domestic operating environment. The global credit rating agency has had a negative outlook on the Indian banking system since November 2011.
 
The debate in the Lok Sabha on allowing FDI in multi-brand retail, which began this afternoon, lifted the benchmarks once more in late trade. Buying in heavyweights also supported the gains. The market hit its high in the last half hour with the Nifty going up to 5,895 and the Sensex climbing to 19,374.
 
The market closed off highs on a minor bout of selling towards the end of the trading session. The Nifty rose 18 points (0.31%) to 5,889 and the Sensex settled 43 points (0.22%) up at 19,348.
 
Among the broader indices, the BSE Mid-cap rose 0.10% and the BSE Small-cap index gained 0.595. 
 
The top sectoral gainers were BSE Oil & Gas (up 1.57%); BSE Realty (up 0.84%); BSE Power (up 0.83%); BSE Bankex (up 0.75%) and BSE Healthcare (up 0.32%). The key losers were BSE Consumer Durables (down 0.72%); BSE IT (down 0.68%); BSE Auto (down 0.43%); BSE Metal (down 0.35%) and BSE TECk (down 0.27%).
 
Eleven of the 30 stocks on the Sensex closed in the positive. The main gainers were Tata Power (up 4%); Reliance Industries (up 2.49%); State Bank of India (up 1.59%); Bajaj Auto (up 1.55%) and ICICI Bank (up 1.53%). The chief losers were Mahindra & Mahindra (down 1.75%); Wipro (down 1.65%); NTPC (down 1.34%): Sterlite Industries (down 1.29%) and TCS (down 1.25%).
 
The top two A Group gainers on the BSE were—United Breweries (up 19.20%) and Jaiprakash Power Ventures (up 9.77%).
The top two A Group losers on the BSE were—Jet Airways (down 5.17%) and CRISIL (down 5.09%).
 
The top two B Group gainers on the BSE were—Eastern Silk Industries (up 20%) and Elder Pharmaceuticals (up 19.99%).
The top two B Group losers on the BSE were—Mahavir Impex (down 18.49%) and Shekhawati Poly Yarn (down 17.36%).
 
Out of the 50 stocks listed on the Nifty, 22 stocks settled in the positive. The major gainers were Jaiprakash Associates (up 4.52%); Tata Power (up 3.95%); RIL (up 2.59%); Ranbaxy Laboratories (up 2.26%) and Reliance Infrastructure (up 1.84%). The major losers were Wipro (down 2.17%); M&M, Ambuja Cement (down 2.05% each); TCS (down 1.82%) and Grasim Industries (down 1.34%).
 
Markets in Asia closed mixed as US lawmakers worked out new budget proposals to avoid new taxes and spending cuts. An unexpected drop in US manufacturing output in November also hurt investor sentiment in the export-oriented continent.
 
The Shanghai Composite climbed 0.78%; the Hang Seng gained 0.31%; the KLSE Composite rose 0.02% and the Taiwan Weighted added 0.015. On the other hand, the Jakarta Composite dropped 0.76%; the Nikkei 225 declined 0.27%; the Straits Times fell 0.12% and the Seoul Composite settled 0.255.
 
At the time of writing, the key markets in Europe were trading with gains in the range of 0.19% to 0.81% and the US stock futures were marginally higher.
 
Back home, foreign institutional investors were net buyers of shares aggregating Rs302.68 crore on Monday while domestic institutional investors were net sellers of equities totalling Rs335.94 crore.
 
Apollo Tyres is planning to set up a 2 x 7.5 megawatt coal-based thermal power plant at its Oragadam facility near Chennai in Tamil Nadu. The plant will help the company become self-sufficient for its power requirements for critical equipments, said the company in a statement. The stock gained 0.545 to settle at Rs84.50 on the NSE.
 
Mumbai based public sector lender, Dena Bank, has waived processing fees for housing loans and car loans. The bank is also offering 50% discount on the processing fees of personal and gold loans. The move follows a directive from the finance ministry asking banks to focus on retail advances. The stock fell 0.35% to close at Rs112.90 on the NSE.
 
Coal India is targeting 46 million tonnes of production in December, up from 39 million tonnes in November to meet its annual production target of 464.10 million tonnes by March, 2013. This would be just close to 7% higher than last year's December month production, when around 43 million tonne of coal was produced. The stock fell 0.48% to settle at Rs364.40 on the NSE.
 

 

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IDBI Mutual Fund launches Gilt fund

IDBI Gilt Fund is a debt scheme with a mandate to invest in government securities and other such debt instruments

 
Mumbai: IDBI Asset Management Co, the mutual fund subsidiary of IDBI Bank, on Tuesday launched an open-ended gilt scheme named 'IDBI Gilt Fund' which will invest government securities and treasury bills, among others, reports PTI.
 
"The gilt fund is a debt scheme with a mandate to invest in government securities and other such debt instruments," its managing director and chief executive Debasish Mallick told reporters.
 
He also said as there is a likelihood of easing in monetary policy going ahead, the gilt fund will be able to give 'sound' returns.
 
The new fund offer will open for subscription on 5th December and close on 17th December. The scheme will reopen for subscription from 27th December onwards.
 
Investors can invest in this scheme through systematic investment plan (SIP) route with investment of Rs500 per month and the minimum investment lumpsum will be Rs5,000.
 
On the amount the fund house is likely to mop up, Mallick said he is hopeful of garnering around Rs100 crore during the initial subscription period.
 
He also said the fund house would consider launching a diversified fund in the equity space going ahead.
 

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