Equity funds in India suffer record losses
Lipper research shows equity funds posted an average loss of 16.50% in January. Foreign institutional investors pull out a record $3 billion from Indian stocks.
Equity funds in India posted an average loss of 16.50% in January, their worst monthly average loss in seven years.
The correction in Indian bourses started quite late compared to others in Asia. However, the very brisk and sharp fall has knocked valuations down several levels.
January saw the highest ever monthly outflow of foreign institutional investor money ù more than $3 billion ù from Indian stocks since foreign institutions started investing in the country. Domestic funds, however, supported the markets ù pumping more than Rs77 billion ($8.5 billion) into stocks last month.
The US seems to be headed towards a recession, with its economy almost stalling in fourth quarter 2007 when it registered a dismal growth of 0.6%. The Fed is proactively trying to bail out the troubled US economy, but many feel it may already be too late for that. In India too, growth seems to be moderating a bit lately, with industrial growth slowing to single-digit figures from robust double-digit growth rates a few months back.
According to advance estimates released by the government, gross domestic product growth is also expected to slow to 8.7% for fiscal 2007-2008.
Average January performance of fund groups registered for sale in India, by asset types:
Equity India -16.50%
Mixed Asset Other Flexible -11.84%
Equity Global -10.58%
Mixed Asset Other Aggressive -8.75%
Mixed Asset INR Balanced -5.63%
Mixed Asset Other Conservative -2.22%
Protected -2.18%
Bond INR General +0.81%
Money Market INR +0.63%
Bond INR Government +0.81%
Bond USD +0.94%
Commodities +10.06%
The correction in Indian bourses started quite late compared to others in Asia. However, the very brisk and sharp fall has knocked valuations down several levels.
January saw the highest ever monthly outflow of foreign institutional investor money ù more than $3 billion ù from Indian stocks since foreign institutions started investing in the country. Domestic funds, however, supported the markets ù pumping more than Rs77 billion ($8.5 billion) into stocks last month.
The US seems to be headed towards a recession, with its economy almost stalling in fourth quarter 2007 when it registered a dismal growth of 0.6%. The Fed is proactively trying to bail out the troubled US economy, but many feel it may already be too late for that. In India too, growth seems to be moderating a bit lately, with industrial growth slowing to single-digit figures from robust double-digit growth rates a few months back.
According to advance estimates released by the government, gross domestic product growth is also expected to slow to 8.7% for fiscal 2007-2008.
Average January performance of fund groups registered for sale in India, by asset types:
Equity India -16.50%
Mixed Asset Other Flexible -11.84%
Equity Global -10.58%
Mixed Asset Other Aggressive -8.75%
Mixed Asset INR Balanced -5.63%
Mixed Asset Other Conservative -2.22%
Protected -2.18%
Bond INR General +0.81%
Money Market INR +0.63%
Bond INR Government +0.81%
Bond USD +0.94%
Commodities +10.06%
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