Fund managers bullish on Indian equities in long term
While fund managers continue to express concerns about India’s twin deficits (fiscal and current account), they are of the view that macro-economic conditions have stopped deteriorating.
“If the government is able to push through all the reforms, it will be very positive. We (Indian markets) would head for a good peak if the government manages to improve the Indian macro-economic conditions,” said Sankaran Naren, CIO, ICICI Prudential AMC, adding that the diesel price hike was the first big positive.
Speaking at the Morningstar investor conference, fund managers said that a reversal in interest rate cycle would be another boost to Indian equities. They said that interest rates are seen declining gradually over the next one year.
“From RBI actions, it seems the it may lower interest rates by 50 bps by March 2013,” said a debt fund manager.
Fund managers said valuations looked comfortable and it was a good time to invest in Indian equities. However, they added that investing in cyclical would give decent returns due to volatility and uncertainty in the economic conditions.
“Economic and corporate growth have bottomed out. With a GDP growth of 5-6%, the market would still grow in double digits, albeit on the lower side,” said Kenneth Andrade, group director, IDFC AMC. Andrade added that corporate
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