Mutual funds see stocks dipping this week

In the truncated week, equity fund managers see the share market remaining slightly down while debt asset managers will keenly monitor Reserve Bank of India’s move on banks’ held-to-maturity of bonds along with the new borrowing calendar for October-March.

“Market will remain volatile with a negative bias as valuations are not supportive,” a fund manager at a private mutual fund said. Taurus Mutual Fund’s managing director R K Gupta shared that view, adding, “a 200-point correction may be seen this week.”

On Friday, the Bombay Stock Exchange’s Sensex and National Stock Exchange’s Nifty fell around 0.55% to close at 16,693 and 4,958.95 respectively. According to Gupta, people will abstain from taking a long position, as it is a very short week to trade. Also cues from global markets will be sought for, he said. The stock market will be shut on Monday and on October 2 due to Dusshera and Gandhi Jayanti respectively.

Equity fund managers see investment avenues in banking, textiles and infrastructure sectors in the near term. On the debt side, the market will remain shut on Monday, Wednesday and October 2 due to Dusshera, banks’ half yearly closing and Gandhi Jayanti.

However, any news by the apex bank on the hike in held-to-maturity holdings will lift the debt market, asset managers believe. “This week is very short, so all depends on whether RBI announces any hike in the HTM policy (limit),” Birla Sun Life Mutual’s fixed income head Maneesh Dangi said. RBI is looking at hiking the limit on banks’ HTM gilt portfolio; currently banks can keep a maximum 25% of net demand and time liabilities in the HTM segment.

“If any announcement comes then (debt) market will rally 10 basis points and in its yields may withdraw by 30-40 basis points, Dangi said.