Stock Market
Indian markets didn’t like the budget too much and they continued to be week. US Federal Reserve’s decision to pump in 200 Billion USD to ease liquidity and intention to further cut interest rates helped the market to some extent. Foreign investors (FIIs) are net sellers on most days and domestic institutions are adopting wait & watch policy. Retail participation is very low.
Positives –Efforts being made by Fed Reserve, Attractive valuations
Negatives – Lack of FII/retail participation, Inflation pressures, expected slowdown of Indian economy.
Market is expected to be range bound and waiting for next major trigger. Long term investors have a good opportunity to enter the market at these
low levels.
Commodities
As anticipated in last issues of NRK Sandesham, commodity prices including agri commodities, gold, oil and metals are rising as investors moving away from stocks to commodities due to speculations, falling Dollar, Inflation fears etc.
Dollar
Dollar is falling against Euro and other major currencies but appreciating against Indian Rupee due to foreign funds’ withdrawals from share market. Those NRIs who were waiting for a better rate of Dollar or Dollar linked currencies (as compared to the old rates) to send money to India, can do so although future movements of Dollar can not be predicted.
Mutual Fund
As discussed above - commodity prices are rising rapidly due to various reasons. Mutual Fund investors who want to ride this expected boom can consider investing in SBI Mutual Fund’s “Magnum Comma Fund”. This fund invests in stocks of companies engaged in commodities business (e.g. Steel, Cement, Metals) & does not directly invest in commodities.
· Minimum investment Rs 5,000/- and in multiples of 1,000/-
· Launched 24/08/2005, given more than 40% gain annually.
· Benefit from commodity price rises; this is the only fund to focus on Commodities.
· SBI branches are selling this scheme. Please contact your nearest SBI branch or us.
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