As Sensex and Nifty hit 13 month low of 16,990.91 and 5,116.45 following global uncertainties, Cafemutual spoke to MF experts to find out how this will impact the markets and what you should be telling your investors
Fears of a possible US double-dip recession and worsening European sovereign-debt woes resulted in a massive sell-off today. At the time of writing, the Sensex and Nifty were trading at 17,223 and 5,198; down 470 and 134 points respectively from yesterday’s close.
Speaking on the market crackdown, S Naren, CIO, Equities, ICICI Prudential AMC said “There is no worry on the long-term for the Indian markets because crude oil has corrected significantly which is good for India. Investors should continue to be investing in equities at this time”.
Neelesh Surana, Head - Equities, Mirae Asset Mutual Fund says it’s a knee jerk reaction to global uncertainties. He also said investors who are not fully invested can allocate one third of their portfolio lump sum at these levels.
Sundeep Sikka, CEO, Reliance Mutual Fund says “Valuations are looking attractive. We would advise investors to continue investing through SIPs over a long term as it’s difficult to time the market”. He also added that lump sum investment can be spread over a period of one or two months.
“India’s domestic story is very strong. I don’t think this weakness will last for too long. When the world growth starts to come off India does very well. Investors can look to accumulate systematically at these levels,” says Puneet Chaddha, CEO, HSBC MF.
On Thursday, 4 August 2011, the Dow Jones Industrial Average slumped 512 points at 11,384, its biggest one-day fall since December 2008. This followed a series of weak US economic data that has intensified concerns about a US fall back into recession coupled with concerns in Euro-zone that the troubled economies of Italy and Spain too might need help from the European Union.
What should you tell your investors?
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This is a fall out of the global events.
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This is not likely to have any long term impact on Indian markets; in fact, India might benefit from the fall in prices of crude oil and other commodities.
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Those with spare cash can look at investing lump sum prudently to take advantage of the attractive levels.
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Others should continue investing through SIPs
