Fund managers positive about future of markets

The markets may not be going through its best phase at the moment with fears of geopolitical risks and pullback in crude prices looming large. However, fund managers still seem to be bullish about the future of the markets for 2015.

According to a fund manager survey by ICICI Direct, most fund managers are positive on the equity markets for the rest of the calendar year.

Among the fund managers surveyed, 7 per cent expect the BSE Sensex to be up in the range of 10-15 per cent while 29 per cent expect it to be up 15-20 per cent at the end of calendar year 2015, the survey said.

As far as valuations are concerned, the fund managers certainly seem to believe that the markets are not undervalued. While a minor part of the fund managers (around 11 per cent) believe that the markets remain overvalued at current levels, a vast majority of them (around 89 per cent) believe that the markets are fairly valued currently.

The survey indicates that fund managers are certainly concerned about a pullback in oil prices. Around 50 per cent of fund managers believe a pullback in crude oil prices is a major risk for the Indian markets while 33 per cent of them believe that geopolitical uncertainty and slowdown in China are other major risks for the markets.

Interestingly, none of the fund managers believe that the US Fed rate hike is a major risk to the markets.

The fund managers have also indicated that they expect the Reserve Bank of India (RBI) to be quite aggressive when it comes to rate cuts in 2015.

Most fund managers (86 per cent) surveyed expect the repo rate to be cut by 50 bps in the rest of the calendar year.