This could well be the year of hybrid funds
What is your outlook for the equity market in the year ahead?
CY12 was fruitful for the Indian equity markets. With Nifty returns of 27.7%, the benchmark has been one of the best performers among key global markets. This was despite the fact that the global markets remained uncertain and domestic macros deteriorated. However, positives came in form of renewed activity on the reforms front and clearing of some key Bills in Parliament, which seemed to have attracted FIIs after July 2012.
We believe that this optimism should be carried forward in 2013. With no major political events for the larger part of this year, one can expect good progress on the reforms front. This should also help improve the investment cycle.
After a year of poor macro-economic data, one can also expect revival on the industrial and GDP growth fronts. Subdued commodity prices and better farm crop should help inflation in trending lower. Lower inflation should lead to softening of interest rates and boost overall growth. Equity market valuations on a forward basis have been reasonable. Thus, if the issues of
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