Sept 2011: Indian Market Outlook: Kotak Securities

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Outlook

•	Indian equity market is expected to remain volatile in the months ahead on back of global events and news flow from Eurozone & US; and RBI policy actions
•	Key changes proposed to European Financial Stability Facility (EFSF) to combat the Eurozone debt crisis include raising Germany's share of EFSF loan guarantees.
•	Germany parliamentary vote on changes to the EFSF scheduled for Sep 29; implications to be seen going forward
•	Valuations of Indian equity market look comfortable. Sensex currently trading at 12.8X FY13 earnings, which is around the mid point of historic average PE band. Hence, risk - reward from current Sensex levels appears favourable

Strategy

•	Continue to remain Neutral at current levels.
•	Given the adverse global news flow and growth concerns in Eurozone and US, it would be prudent going slow on lump sum allocation to equities; investors should preferably look to enter equities in a staggered manner going forward. Maintain large cap bias.
•	Maintain large cap bias.

Indices Movements

 Source: Bloomberg

 Source: Bloomberg

 Source: Bloomberg

 Source: Bloomberg

Recommended Large Cap Funds

Schemes	Corpus (in Crs)	Fund Manager	1 Year (%)	3 Years (%)
Fidelity Equity Fund	3,472	Sandeep Kothari	- 5.27	13.17
Franklin India Bluechip Fund	3,978	Anand Radhakrishnan	- 3.33	12.76
HDFC Top 200 Fund	11,065	Prashant Jain	- 7.89	13.47
ICICI Prudential Focused Bluechip Equity Fund - Ret	2,545	Prashant Kothari	- 1.69	15.92
Index
S&P CNX Nifty Index			- 7.43	1.11

Source: Financial Express

Performances of schemes less than 1 - year are absolute, and above 1 - year are CAGR. Performance of schemes is as on Aug 30, 2011, while Average AUM of fund's are as on Jun 30, 2010