In November, domestic equity markets exposed investors to the proverbial “sting in the tail” phenomenon. Towards the end of the month, a leading corporation with linkage to the Dubai government asked its lenders to defer debt repayments by a period of six months. This led to fears of a credit crisis and a sell-off in equity markets across the globe. Although domestic equity markets closed in positive territory, investors did face some anxious moments with volatility ruling the roost.
Also See Equity Category Performance (Graphics)
Factors such as positive Index for Industrial Production numbers and the Indian government’s push towards disinvestment helped the sentiment; conversely, rising food inflation continued to be a cause for concern.
The Bombay Stock Exchange (BSE) Sensex rose by 6.5% over the month. It has risen by 75.5% on a year-to-date (YTD) basis. During the month, stocks from the large-cap segment fared better than the mid- and small-cap peers. The BSE-100 Index posted a growth of 7%; the commensurate numbers for the BSE Mid-Cap Index and the BSE Small-Cap Index were 6.7% and 6.6%, respectively. On a YTD basis, the BSE-100 Index (up 78.7%) has failed to keep pace with the BSE Mid-Cap (98.3%) and the BSE Small-Cap (104.3%) indices.
In order to merit funds’ long-term performance, they have been ranked based on their one-year Morningstar risk-adjusted return for this review.