Mutual Fund Roundup: October 2010

Market Overview

In the month of October 2010, the Indian equity markets (BSE Sensex) oscillated by maintaining an upward bias, but closed the month in the negative terrain by mere 36.8 points (-0.2%). The Government’s plans of divesting 10% stake (amounting to 15,000 crore) in “Coal India Limited (CIL)” through an IPO, also induced many investors to book profits, and invest the same in this much awaited IPO which was open for subscription from October 18, 2010 till October 21, 2010. The issue got a good response from investors as it was over-subscribed 15.17 times. The IPO also attracted a whooping 1.20 lakh crore from the FIIs, as they continued to show their long-term confidence towards the Indian economy, despite near term slow down in August 2010 IIP (Index of Industrial Production) at 5.6% (data released in October 2010).

Gold continued to move up, as buying was seen in the precious yellow metal during the Dusshera, and advance buying for the festival of lights – Diwali. Also the concerns of recovery in the developed economies, due to down-beat economic data too fuelled the rally in the precious yellow metal.

Crude oil prices also climbed up by 3.1% as, the demand from most oil consuming nations rose as the stimulus package continued in most such nations. The 10-Yr G-Sec yield hardened by 29 basis points, as the Reserve Bank of India (RBI) expressed concerns about stiff inflation (of 8.62% as reported for September 2010) prevailing in the Indian economy, which led the markets to expect another 25 basis points increase in the policy rates (both repo rate as well as the reverse repo rate).

Monthly Market Roundup

	As on 29/10/2010	As on 30/09/2010	Change	% Change
BSE Sensex	20,032.3	20,069.1	(36.8)	-0.2%
CNX Midcap	9,360.7	9,164.3	196.5	2.1%
Re/US $	44.4	45.0	0.5	1.2%
10-Yr G-Sec (%)	8.13	7.84	0.29	29bps The American International Group Inc., (AIG) is in talks with potential buyers to sell its mutual fund business in India having 1,019.77 crores of Assets Under Management (AUM). Bank of America Merrill-Lynch has been appointed as the investment banker for the transaction.

Add Comments