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Business Recorder
2 days ago
- Business
- Business Recorder
India's FX reserves drop $9bn to about $689 billion, reflecting tariff-driven rupee defence
MUMBAI: India's foreign exchange reserves fell to $688.9 billion as of August 1, Reserve Bank of India Governor Sanjay Malhotra said on Wednesday. The forex reserves fell $9.3 billion compared to the previous week, which economists said reflects the central bank's defence of the rupee amid tariff-related uncertainties. Detailed data on forex reserves will be released later this week. The rupee slid 1.18% against the dollar in the week through August 1, marking its sharpest weekly decline in nearly three years. It has lost another 0.2% so far this week and would likely have breached its record low if not for the Reserve Bank of India's intervention to support the currency, according to traders. India central bank net bought $1.76 billion in forex market in May India faces the imposition of a 25% tariff on its shipments to the U.S. from Friday, and President Donald Trump has warned of 'very substantial' additional levies because of New Delhi's oil imports from Russia. The RBI kept its growth forecasts unchanged at its policy review on Wednesday and left rates unchanged. 'Given that the Indian rupee is weakening and narrowing of the global interest rate differentials, the scope for rate reduction was slim,' said Umesh Kumar Mehta, chief investment officer at SAMCO Mutual Fund.
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Business Standard
2 days ago
- Business
- Business Standard
India's forex reserves fall $9 billion to $689 bn reflecting rupee defence
India's foreign exchange reserves fell to $688.9 billion as of August 1, Reserve Bank of India Governor Sanjay Malhotra said on Wednesday. The forex reserves fell $9.3 billion compared to the previous week, which economists said reflects the central bank's defence of the rupee amid tariff-related uncertainties. Detailed data on forex reserves will be released later this week. The rupee slid 1.18 per cent against the dollar in the week through August 1, marking its sharpest weekly decline in nearly three years. It has lost another 0.2 per cent so far this week and would likely have breached its record low if not for the Reserve Bank of India's intervention to support the currency, according to traders. India faces the imposition of a 25 per cent tariff on its shipments to the U.S. from Friday, and President Donald Trump has warned of "very substantial" additional levies because of New Delhi's oil imports from Russia. The RBI kept its growth forecasts unchanged at its policy review on Wednesday and left rates unchanged. "Given that the Indian rupee is weakening and narrowing of the global interest rate differentials, the scope for rate reduction was slim," said Umesh Kumar Mehta, chief investment officer at SAMCO Mutual Fund.
Economic Times
25-07-2025
- Business
- Economic Times
Why Multi-asset funds are a smart choice in current market environment
In a volatile market environment, diversifying across asset classes using multi-asset funds can be an effective strategy, as they offer exposure to a mix of equities, debt, and gold/silver within a single investment, says Viraj Gandhi, CEO, SAMCO Mutual Fund. ADVERTISEMENT "This diversified approach helps cushion the portfolio during market downturns while still allowing participation in upside movements," he says in an interview. Edited excerpts from a chat: Nifty is trading at a premium to historical averages. Are valuations becoming a headwind or is strong earnings growth enough to justify current multiples? Nifty is currently trading at around 22.5x TTM which is a very minimal premium to historical averages. In fact, Nifty has faced a time and a price correction since the start of the year, which has significantly tamed down valuations and made some stocks relatively cheaper in the largecap space. That said, overall earnings growth hasn't fully picked up yet. We may still be a few quarters away from seeing strong, broad-based earnings. Until then, the market might stay selective, rewarding only those companies showing clear growth. The market has been caught in a consolidation range for the last 2 months amid lack of positive triggers. What can make or break the deal for bulls going ahead? For bulls to take charge again, a few key factors will be critical. An improvement in corporate earnings and supportive global cues such as a potential US rate cut or easing geopolitical tensions could provide the much-needed boost. On the flip side, any disappointment in earnings, high valuations without corresponding growth, or global headwinds like sticky inflation or geopolitical shocks could weigh on this sentiment. ADVERTISEMENT India has seen record SIP inflows and retail participation. Is this depth sustainable in the next correction? In June 2025, SIP inflows reached a record high of ₹27,269 crore, according to the Association of Mutual Funds in India (AMFI). This represents a 2.2% increase compared to the previous month's inflow of ₹26,688 crore. The number of contributing SIP accounts also rose, reaching 8.64 crore in June, up from 8.56 crore in May. This growing monthly SIP inflows number highlights the growing maturity of the retail investors as this steady inflow has provided a strong cushion for the markets, especially during phases of global volatility. Many first-time investors have entered the markets post Covid, largely driven by rising financial awareness, better digital access, and strong past returns. While this is encouraging, it also means a large segment of investors has yet to experience a sharp or prolonged market downturn. This could test their resolve, especially if corrections extend beyond a few weeks and start affecting portfolio returns more visibly. ADVERTISEMENT That said, the shift towards disciplined investing through Systematic Investment Plans (SIPs) and the growing popularity of mutual funds indicate that a core segment of investors is here for the long term. Even if we see some dip in the flows during corrections, it is likely to be temporary. The overall trend of rising domestic participation is expected to continue, driven by favorable demographics, under-penetration of financial products, and increasing trust in market-linked instruments. In essence, while some short-term impact is possible, the structural depth looks sustainable. ADVERTISEMENT Are there specific sectors or themes that you believe are positioned for strong growth or present heightened risks in the current environment? In the current environment, financial services, pharmaceutical and healthcare stand out as sectors positioned for strong growth. What are the biggest risks domestic investors should be aware of while navigating today's markets? In the current market environment, geopolitical risk stands out as one of the biggest concerns for domestic investors. With escalating tensions in the Middle East and the looming August deadline for the implementations of tariffs by President Donald Trump, any flare-up in these areas could create significant volatility, not just globally, but also in Indian markets. ADVERTISEMENT With heightened market volatility, what approaches or strategies do you recommend for investors trying to manage risk and capitalize on market opportunities? In a volatile market environment, it's important for investors to strike a balance between managing risk and capturing potential opportunities. One effective strategy is to diversify across asset classes rather than relying solely on equities. Multi-asset funds can be a smart choice in this regard, as they offer exposure to a mix of equities, debt, and gold/silver within a single investment. This diversified approach helps cushion the portfolio during market downturns while still allowing participation in upside movements. Given the correction in the last few weeks, do you see some opportunities in defence stocks? Defence stocks have seen a strong rally recently, especially after the Pahalgam attack, as investor interest in the sector picked up. The broader theme remains intact over the long term, driven by increasing indigenization efforts and a clear push to reduce reliance on foreign suppliers for defense equipment. Government initiatives, rising defense budgets, and strong order pipelines for key players add further support to the sector's outlook. While some profit booking has been observed in the last few days, which is natural after a sharp run-up, the long-term story still looks promising. In the short term, valuations may seem stretched, and some consolidation can't be ruled out. However, for investors with a longer horizon, defense remains a structural growth theme with potential for steady returns as India continues to build its domestic capabilities. Expectations from Q1 earnings are low. Which pockets of the market do you think can surprise you? Broadly, Q1 could be muted on expectations. Capital goods and infra could positively surprise if operating leverage might start to kick-in, banks may do better due to lower credit costs and autos might surprise due to softening raw material prices.
Time of India
01-07-2025
- Business
- Time of India
Confused about investment in stocks, gold & silver? Simplify it with multi-asset mutual funds!
With gold , silver , and equity market rallying and investors confused about which one to choose for investment, the market experts recommend that given the current geopolitical backdrop, political uncertainty, and global inflationary pressures, investors should prioritize a multi asset strategy as diversification helps in mitigating risk during turbulent times. 'Given the current geopolitical backdrop including the Israel-Iran conflict, global inflationary pressures, and political uncertainty, investors should prioritize a multi-asset strategy. Diversification across asset classes can help mitigate risk during such turbulent times. In such an environment, multi-asset funds become an ideal choice for the consumer as they offer exposure across equity, debt, commodities, and precious metals,' Viraj Gandhi, CEO, SAMCO Mutual Fund shared with ETMarkets. Also Read | Sensex vaults 11,000 points from April lows. Which mutual funds should you buy? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » He further shared that multi asset funds provide automatic rebalancing, professional management, and dynamic allocation, which is especially useful during times of elevated volatility and this is not the time to be overly aggressive. Therefore, the path lies in maintaining a diversified portfolio that can absorb shocks and still participate in potential upside, Gandhi recommended. Another expert mentions that gold prices have rallied due to global macro uncertainties and central bank buying, silver has benefited from both industrial demand and its traditional role as a precious metal, has also gained significantly whereas equity markets are hitting all-time highs, supported by high FII inflows, strong earnings outlook and macro stability. Live Events 'Due to these positive trends, this category might attract investors. However, one should remember that diversification should not be done at a fund level as it becomes difficult to reallocate across asset classes as and when required,' Chethan Shenoy, Executive Director & Head - Product & Research at Anand Rathi Wealth Limited shared with ETMutualFunds. Out of 29 multi asset funds, the majority of funds hold over 65% allocation in equity, 25% in debt and nearly 10% in others which includes gold/commodities. DSP Multi Asset Allocation Fund is an exception which holds nearly 88% in others. (Data source: ACE MF) Post witnessing the allocation, Shenoy mentions that the uniformity across most schemes limits both diversification and flexibility and since the equity portion is often large-cap heavy, investing across multiple such funds may still not provide meaningful diversification. He further advised that instead of relying on multi asset allocation funds , investors should consider reaching their desired asset class exposure at the portfolio level and allocating to multi asset funds may not be the most efficient choice, especially when similar or better results can be achieved through a customizable equity-debt mix. Also Read | JioBlackRock Mutual Fund: 3 NFOs open for subscription today. Should you invest? In the current calendar year so far, multi asset allocation funds received a total inflow of Rs 11,054 crore, the second highest among all hybrid categories. Among six-hybrid mutual fund categories, in March, multi asset allocation funds received the highest inflow of Rs 1,670 crore. The total AUM of multi asset funds was recorded at Rs 1.18 lakh crore as on May 31, 2025. As these funds are gaining investors' interest, Pradeep Kesavan, Fund Manager and Equity Strategist at SBI Mutual Fund recommends multi asset funds along with flexi cap and balanced advantage funds as a good option for new investors with a moderate risk profile. In the last one year, there were 24 multi asset allocation funds, of which eight gave double-digit, 14 gave single-digit whereas two gave negative returns. WOC Multi Asset Allocation Fund offered the highest return of 15.71% in the last one year, followed by DSP Multi Asset Allocation Fund which gave 13.30% return. Aditya Birla SL Multi Asset Allocation Fund was the last one to offer double-digit return and it gave 10.40% return in the last one year. HSBC Multi Asset Allocation Fund offered the lowest positive return of 4.53%. Shriram Multi Asset Allocation Fund and Motilal Oswal Multi Asset Fund lost 3.23% and 9.01% respectively in the last one year. Shenoy is of the opinion that despite the recent performance, multi-asset allocation funds may not fully capitalize on each asset's potential due to their preset allocation structures and these funds remain equity-heavy, and do not offer significant differentiation from equity funds. 'If investors are already defining their asset mix at the overall portfolio level, adding a multi-asset allocation fund could lead to redundancy or concentration, especially if the fund is skewed toward equity,' he added. Also Read | 11 equity mutual funds multiply investors' lumpsum investment by over 4.3 times in 5 years 'Hence, investors should consider avoiding multi-asset allocation funds and instead opt for individual exposure to equity and debt based on their financial goals and risk profile. This allows for the ideal strategy for better returns, long term growth and wealth creation,' Shenoy recommends. According to the Sebi mandate, multi asset allocation funds invest in at least three asset classes with a minimum allocation of at least 10% each in all three asset classes. One should always invest based on their risk appetite, investment horizon, and goals. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Mint
24-06-2025
- Business
- Mint
Expert view: Nifty may deliver single-digit returns in CY25; positive on pharma, private banks, says SAMCO MF CIO
Expert view on markets: Umeshkumar Mehta, CIO of SAMCO Mutual Fund, expects no significant positive surprises on the earnings front, which may keep market momentum in check. Talking to Mint, Mehta shared his views on the Indian stock market, key challenges and the sector he is positive about. Here are the edited excerpts of the interview: We expect benchmark indices to deliver single-digit growth for the year. The modest performance of the Nifty 50 in the first half was largely driven by a slowdown in corporate earnings. Looking ahead to the second half, we do not foresee any significant positive surprises on the earnings front, which may keep market momentum in check. Adding to the subdued outlook is the overhang of geopolitical uncertainty, particularly the Iran-Israel conflict. The duration of this conflict remains unpredictable, but its prolonged continuation could have broader implications. Iran, being one of the world's largest producers and suppliers of oil and gas, plays a critical role in the global energy ecosystem. Any sustained disruption in this region could lead to volatility in crude oil prices, with potential ripple effects across the global economy. Currently, the Indian stock market is navigating several obstacles: Geopolitical instability, particularly the escalating tensions in the Middle East involving Iran and Israel, continues to weigh on investor sentiment. Additionally, the deadline for the three-month extension of the tariffs is approaching fast, adding to global trade-related uncertainty, which could have ripple effects. Domestically, there are segments within the small and mid-cap segments where valuations are a matter of concern. Despite headwinds, India stands out for its macroeconomic resilience. This is characterised by resilient domestic demand, stable inflation and a policy environment. Investors with a long-term horizon should use corrections as an opportunity to accumulate rather than waiting for complete clarity, which may never fully arrive. The pharmaceutical sector continues to present compelling opportunities for investors, supported by a mix of strong domestic fundamentals and favourable global dynamics. In the current geopolitical climate, the China+1 strategy has gained further momentum as global companies look to diversify their supply chains away from China. This shift places India in a strategic position, given its established leadership in generic drug manufacturing, robust R&D capabilities, and cost-effective production processes. With a reputation for producing high-quality medicines at globally competitive prices, India's pharma industry is well-positioned to play an even more critical role in global healthcare. Domestically, rising healthcare awareness, increased government spending, and growing demand for affordable medicines are additional tailwinds that strengthen the sector's long-term growth prospects. Private sector banks have witnessed a rally in recent weeks, yet they continue to offer valuation comfort relative to other segments of the market. Their strong fundamentals, healthy balance sheets, and improving credit growth outlook position them well for sustained performance. The recent RBI rate cut further enhances their prospects by reducing funding costs and potentially boosting loan demand, making the sector an attractive option for investors seeking both stability and growth. On the consumption front, while overall demand has been somewhat subdued, early signs of recovery are visible, particularly in rural areas. The tax cuts announced in the February Union Budget are gradually starting to benefit middle-class households and small businesses, translating into higher disposable income. As spending picks up, sectors such as FMCG, travel, apparel, and restaurants are likely to see increased traction, offering strong long-term potential for investors riding India's consumption wave. In India, after implementing a front-loaded 100 basis point cut in the repo rate, the Reserve Bank of India (RBI) is expected to hold off on further action for now, allowing time to gauge the effects of the easing. Additional rate cuts could be on the table if economic growth weakens further or if disinflation gains momentum, with any potential moves most likely to be considered in the December or February policy meetings. The interest rate trajectory in the US this year is likely to remain cautious and data-dependent, which reflects the Federal Reserve's wait-and-watch stance given the economic uncertainty due to tariffs. Inflationary pressures continue to persist due to tariff-related risks and geopolitical developments. The Fed appears hesitant to pursue aggressive monetary easing. While some policy easing later in the year cannot be ruled out, particularly if growth softens, the overall stance suggests that any such moves would be limited. However, the outlook could shift if economic data around consumer sentiment and GDP growth weaken. A sharper-than-expected economic downturn could compel the Fed to reconsider its position and adopt a more accommodative approach. For Indian equities, the trajectory of US interest rates remains a key external factor. The Fed's stable or accommodative policy stance tends to favour emerging markets by improving liquidity conditions and boosting investor confidence. This could be beneficial for Indian equity. However, continued global uncertainty, particularly from US trade policies and inflation dynamics, could further increase volatility in the markets. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
