MUMBAI: Fund managers seem to be in no hurry to load up on shares, notwithstanding the 10% correction in stock prices over the last couple of
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weeks. While awaiting the upcoming Budget proposals before firming up their near-term investment strategies, most money managers expect the market to consolidate for the next six months at least.
Fair valuations, a long line-up of share issuances, an upward trend in interest rates and nervous world markets could neutralise positives like a steadily growing domestic economy and reasonably good fund flows from overseas players. At the same time, investors will be keenly eyeing corporate earnings while assigning an earnings multiples to the market.
“Fundamentals rather than (capital) flows will drive the market over the next six months; we are in for a phase of consolidation,” says Nilesh Shah, deputy managing director and chief investment officer, ICICI Prudential AMC, adding, “the market is fairly valued at 14.5-15 times forward (FY11) earnings.” BSE’s 30-share Sensex shed 120 points to close at 15,922 on Wednesday, and NSE’s 50-share Nifty fell 35 points to close at 4757.20.
