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Manish Basu

Kolkata, July 9 The Budget may have fallen short of expectations of the mutual fund investors but a correction in the equity market may stimulate inflows from retail investors, said wealth managers.

“Retail investors should see the post-Budget correction as an opportunity to enter the share market in the next one-two months as long-term fundamentals are strong,” Mr Rajiv Deep Bajaj, Vice Chairman & Managing Director of Bajaj Capital, said.

The Budget has failed to meet investors’ expectations, who would now need to closely watch the forthcoming corporate results and the nature of monsoons before deciding on investments, he said.

“The Budget proves that the market had been running ahead of reality. FIIs have also reacted negatively to the high (6.8 per cent) fiscal deficit recorded this year. It will therefore lead to a reality check and consolidation before the market starts moving up again.”

Mr Sandeep Dasgupta, CEO, Bharti AXA Investment Managers, said: “Retail investors sitting on cash and waiting for a correction should take the systematic investment plan route to enter the market over the next two-three months, and stay invested thereafter. We may see some smart money inflows over the next few months.”

Diversified equity funds might continue to pull the bulk of investments, he added.

Mr Anil Kumar, Chief Executive Officer, Birla Sun Life Mutual Fund, said, “Investors missing out on the rally since March will find an opportunity in a short-term correction.”

The Budget will put renewed focus on infrastructure and also sectors such as pharmaceuticals and FMCG by boosting consumption and rural spending, he said, adding that bank stocks may get hit to some extent on reactions from the bond market. “That a solution to fiscal deficit was not addressed may also have a mid-term impact on the market.”

The raising of income-tax exemption limit and abolition of fringe benefit tax as well as surcharge (10 per cent) on personal income might also encourage retail investors to put money in financial instruments, he added.

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