Fed Meeting : The Most Talked Issue and the Markets Tomorrow ...



U.S FOMC meet was scheduled for today.And now we now the result.The FED has cut the Discount Window Rate (i.e interest rate) by 50bps against an expectation of 25 bps.It was done to averse the threats arsing in the economy which could have led the U.S economy into recession.

Indian Markets is likely to rally sharplyon 19th September 2007 .Markets may see a gap up opening and this gain is likely to continue for the whole trading day.
Banking stocks and Auto stocks are likely to be the major Gainers tomorrow.Laggards like Real Estate and Tech Stocks may also see sharp rally.ICICI Bank,SBI,Reliance Industries Ltd. , Tata Motors Ltd., M&M, DLF etc are likley to lead the rally.Tech stocks may bounce back on the expectations of reviving U.S Economy and continuous order flow because of the revivimg U.S economy.This rate cut may help U.S housing sector to revive.
DOW JONES sharply bounced 221 points as the FED's Rate Cut decision came.
Indian Markets and all emerging markets may see a sharp upswing tomorrow.
(i.e on 19th September 2007 ) .

Infrastructure Funds - On the Top ...

All of you must be aware of the Infrastructure Funds in India.Out of the Top 5 mutual fund performers of last year (i.e 2006), 3 are the "Infrastructure Funds ".
Infrastructure Sector maily includes the companies which supply the most needed material and goods for the development of the economy.Hence these include the Capital Goods Companies.It may also include Construction and Engineering Companies.
There is no proper defination of "Infrastructure Sector".There are about 12 Infrastructure Funds in the market and each fund has a different meaning of "Infrastructure".For eg. ICICI Pru Infrastructure Fund Holds stocks of Financial Sector as well and if we take DSP ML INDIA T.I.G.E.R Fund it holds Pharma Stocks as well.
But yes "Infrastructure Funds" have been the flavour of the past many months.And this story is likely to comtinue.The top performing Infrastructure funds of 2006 are :-

Funds Returns (%)

1. Sundaram Capex Opportunities Fund(G) - 55.89
2.UTI Infrastructure Fund(G) - 61.50
3.ICICI Pru Infrastructure Fund (G) - 60.30
4.Tata Infrastructure Fund (G) - 61.50 .
Infrastructure Funds should form the part of ur Mutual Fund holdings.Infrastructure can become one of the core holdings of your portfolio but it should not be the only core holding.You should have atleast one stable large cap equity diversified fund like Reliance vision fund,HDFC Equity fund or Franklin India Blue chip Fund etc. Ivest in the Infrastructure Funds for long term (of over 4-5 years ) to reap the real gains and SIP(Systematic Investment Plan) is the best way to invest in th e current market scenario.
Please post your comments.

Mutual Funds News :-

1. Morgan Stanley has files two Offer Documents with SEBI.The AMC is likely to come out with two new fund offering i.e one Equity Divesified one Liquid fund.Morgan Staley will launch its funds after a gap of over 13 years.Last offering by Morgan Stanley AMC was Morgan Stanley Growth Fund which was a close ended fund for a period of 13 years and will turn into open ended in 2010.

2.JM Financial Funds have outperformed the sensex returns by over 100 % in the past one month.The best performers have been JM Emerging Leaders Fund and JM Small And Midcap Fund. It has shown that "Small is Big" .

3.Out of the top five performers of the last year three of them are the Infrastructure Funds. Namely Tata Infrastructure Fund,UTI Infrastructure Fund and ICICI Pru Infrastructure Fund.

Mutual Funds In India

Cause of Sharp Decline In the Global Markets.....

Bears are roaring and Bulss are crying.... Here are some reasons which have led to fall in the global markets...The Global Markets are very jittery..and hence has led to the the withdrawl of large amount of funds from the Global Markets...Here are some reasons for sudden downturn in the global markets,..

Plzzz do not take any domestic circumstances for Market corrections and jump on the conclusion....expect recent political crisis......The market has corrected savagly because of the SUB PRIME crisis in the U.S Economy and the fear of downturn and recession in the American Market,....The Rise in the Interest rates in U.S economy has led to the defaults by the debtors(lonee)...When Interest rates were low in the economy then the Financial Institutions like Lehman Bros. Ltd. ,Blackstone,Citygroup Inc. etc. disbursed a huge amount of loans to the people.And a large portion of these loans were given to the buyers of property in the Sub Prime region in U.S.When Interest rates Started to inch up (due to rising inflation in U.S), the emi(i.e monthly installments) started rising and as a result of this the people wereunable to pay back the loans earlier taken by them and hence a sudden liquidity crunch was witnessed in the U.S economy.And hence the prices of the real estate have started to decline by around 8-9 %.When huge financial institutions were unable to get back the loans earlier disbursed,fear of their Bankcruptcy arose.It came into limelight when CITIGROUP Inc. , one of the major lenders in U.S, warned the wall street of its possible bankcruptcy.It pulled down the U.S markets and panic was witnessed among the investors their.Hence investors started to withdraw their money from the mutual funds (both real estate funds and the Global Emerging markets fund) and hence the FUND HOUSES and the FII's started to sell their securities in the GLOBAL MARKETS and in INDIA AS WELL.This Sudden Withdrawl of money lead to Sharp decline in the Indian Markets.But now it seems that these conditions have started to fade away as ECB and FEDERAL RESERVE injected billions of $ in the system.It was Also eased by th recent discount window rate cut by the FEDERAL RESERVE in U.S.It has helped to ease the liquidity crunch in the U.S economy.