The Hindu Business Line : Market view

In the recently released RBI Annual Report, the central bank maintains its outlook of 7.5-8 per cent GDP growth, given the buoyancy witnessed in IIP indices, lead indicators of services activity and robust export demand. A key positive emerging out of the savings data release is the marked increase in share of market-linked financial instruments in the overall financial assets. Indians are increasing their asset allocation to equity investments (both direct as well as through mutual funds). This is a definite positive for the stock market in the near term as well as the long term.

Tata Mutual Fund

The report of the Committee on Fuller Capital Account Convertibility outlined a detailed five-year roadmap in three phases for the transition. If implemented, these proposals could facilitate inflows of serious foreign capital into India, provide a fillip to overseas investments/borrowings by Indian companies and open up additional diversification opportunities for domestic investors. However, the monetary ceilings mooted by the report particularly on overseas investments and borrowings, suggest a very cautious approach to the liberalisation process. The recommended phase-out of Participatory Notes is a positive step for the stock market from a long-term perspective, as clear identification of financial market participants is a necessary step to ensure fair regulation of the markets.

Franklin Templeton Investments

On the foreign exchange front, the rupee's slide was arrested, and the rupee appreciated (though very marginally). This is a positive, as rupee stability/appreciation is one of the determinants of FII flows, apart from corporate earnings growth and global cues. In the short term, upside appears limited in the backdrop of the 1600-point rally witnessed in the BSE Sensex over just the past six weeks.

Principal PNB Asset Management

Attention is now focusing on September-ended quarter results, which are expected to be as robust as the previous quarter. We are seeing follow-through buying from institutions which had lightened up during the May-July decline as well as from the domestic retail investors. Abundant rainfall, while contributing to floods in some parts, on the whole augurs well for agricultural growth, and the economy seems on track to achieve 8 per cent GDP growth for FY-07 (April 2006 to March 2007), thereby putting India amongst the fastest growing economies in Asia.

DSPML Mutual Fund

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