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stocks recording stellar gains. Overseas investors have been selling stocks for most part of last week to the tune of nearly Rs 5,300 crore on the back of likelihood of a sooner than expected reversal of the US stimulus programme which has pumped in billions of dollars in the Indian stock markets. On the other hand, local domestic institutions and funds flush mutual funds have been buying large cap companies helping the indices appreciate and remain at elevated levels. Hence, the BSE Sensex closed last week at 56124 levels while the other benchmark index , the NSE Nifty settled at 16705 record levels . With the markets were scaling new highs , Indian investors have been investing aggressively in New Fund Offers or NFOS of various mutual fund schemes at initial Rs 10 par subscription levels . They expect these funds to deliver better returns over the next one year period and more than the current prevailing bank fixed deposit rates.

Incidentally, the recently concluded NFO of SBI Balanced Advantage Fund collected a whopping Rs 14,000 crore in its initial period of subscription of around two weeks. Analysts expect that all these funds collected by various mutual funds to be deployed over the next few months in a staggered manner. Currently, they are investing in select large cap company stocks which are so called under-valued and that’s why you are seeing the indices gaining ground on a daily basis. On the other hand, mid- and small caps have taken a terrible beating in the month of August. Analysts expect the stock market to remain in an upward trajectory with a positive bias on the back of steady monthly inflow of SIP money and recently accumulated record mutual funds subscriptions from retail and HNI investors. Fund managers and equity analysts expect the indices to remain steady and deliver a 5-6% absolute return over the next six months’ time frame.

Rajiv ,apoor is a share broker, certified mutual fund expert and MDRT insurance agent.