Trading down on sombre macro data

The markets continued to trade in a narrow range, with weak macros like the dismal Index of Industrial Production data and lower July inflation having dashed hopes of a cut in key policy rates by the central bank. India's industrial production contracted 1.8 per cent in June, driven down by a slump in manufacturing, along with wholesale price index-based inflation easing to a 32-month low.

And, weak Japanese economic data tempered European investors' optimism about ECB plans to tackle the Euro zone crisis. Two of the four fund managers of Smart Portfolios Season 4 remained active over August 9-16

SACHIN SHAH
Fund manager, Emkay
Shah was inactive during the period under review. He is sceptical about the current range-bound market, as the weak macro economic data points to a slide in the markets quite significantly from the current levels. Along with this, there is not much hope from the Reserve Bank of India on interest rate cuts, as food inflation is still high. His top holding includes ICICI Bank, Havells India, Mahindra & Mahindra, Bank of Baroda and Sundaram Finance. Shah's net worth is valued at Rs 9.44 lakh, down 5.6 per cent.

RIKESH PARIKH
VP (equity strategies),Motilal Oswal Securities
Parikh carried out several transactions during the period. He added several scrips like Coal India, BHEL, Emami, Allahabad Bank, Oberoi Realty, Gujarat Mineral Development Corporation, Power Finance Corporation, State Bank of India and NIIT Technologies to his portfolio. On the other hand, he booked profits in Emami, Tata Motors and Eicher Motors.

He believes lower inflation and negative IIP growth numbers could increase the probability of lowering interest rates. He sees the current range-bound markets as an indication of the expectation of reforms. On his investments in banking, he says the market is factoring in more concern on the asset quality of public sector banks than warranted, leading to a few banking scrips being available at low valuations. His current top holdings include Engineers India, JSW Energy, Oberoi Realty, Hindalco Industries and Allahabad Bank. Parikhs's net worth is Rs 10.29 lakh, up 3.4 per cent.

ASHISH MITTAL
Fund Manager (PMS), Centrum Wealth
Mittal was active during the week. He bought Axis Bank, Karnataka Bank, Cairn India and Wyeth. Meanwhile, he booked profits in HDFC Bank, Bombay Burmah Trading Corporation and Unichem Laboratories, as he believes further upside is capped in the intermediate term for these stocks.

Mittal believes that with monsoon recovering RBI may consider reducing the interest rates. Also with markets moving ahead of the fundamental developments, he expects the prospective reversal in interest rates and probable affirmative actions by union government would lend credence to the current strength of the market. Government inaction would be the only reason for reversal in the current strength. His top holdings include Balmer Lawrie & Company, Karur Vysya Bank, Tide Water Oil Co (I), Cairn India and Cairn India. Mittal's net worth is Rs 10.72 lakh, up 7.5 per cent.

ALEX MATHEWS
Head (technical and derivatives research),Geojit BNP Paribas Financial Services
There were no transactions for the period under review. Mathews believes if the government takes necessary policy reforms, then the macros can change dramatically in the near term. However, the twin problems like high crude oil prices and deficit rainfall remain a matter of concern. He is hopeful that RBI might reduce interest rates by 25-50 basis points, as high interest rates are a major concern for financial market participants, along with companies facing the heat of high borrowing costs.

His top holdings, as of now, include CRISIL, Timken India, Tata Coffee, CMC and MindTree. Mathews' net worth totals Rs 9.32 lakh, down 6.8 per cent.

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