Four of eight fund managers surveyed by Reuters on August 30, expect the market to correct up to 10 percent and plan to increase exposure in large-cap stocks. "I don’t think there are any triggers for market to move up," said David Pezarkar, head of equities at Shinsei Asset Management, adding he does not expect any new reforms and September quarter results will not be spectacular.
BSE Sensex has gained nearly one percent this month till Aug 30, as the concerns over world economy continue to weigh on the markets. "Growth expectations are coming down quite fast, be it Europe or US....there's a risk which is building up," said Tridib Pathak, director equities at IDFC Asset Management Company.
Foreign funds, till August 29, have pumped in $12.7 billion so far in 2010, part of which was absorbed by the primary markets. While domestic money managers plan to raise equity exposure over the next three months, they see the current market as fairly valued and would wait for a correction.
FINANCIALS SHUNNED, CONSUMER DURABLES PREFERRED
Four of the eight fund managers polled said they would reduce exposure in financials as they have outperformed the market and said it was time to book profits.
Interest rate scene is hardening going forward and banks have outperformed, Shinsei's Pezarkar said adding state-owned banks may see profit-taking as they are trading at historically high price-to-earnings ratio. Banking index on BSE gained nearly 6 percent till August 30, outperforming the broader market.
Software stocks were also not favored by fund managers as they cited concerns over recovery in world economy. However, four of the eight fund managers opted to increase exposure in construction stocks and consumer durables.