Search the Internet          Tips  Sites: Finance, Investment

UTI buying equity in falling market

Financial institutions, including Unit Trust of India, are considering various measures to prop up the market and prevent themselves from heavy losses in the wake of turmoil prevailing in the Indian financial sector after terrorist attacks in the US.

"We are buying (equities)," UTI Chairman M Damodaran said in New Delhi on Monday, when asked about the fund's position after the fall in Sensex.

UTI, whose flagship scheme US-64 has a heavy 60 per cent weightage in equities, is likely to witness a fall in its asset values due to the falling market condition.

Damodaran, however, reassured UTI investors saying, "every thing is fine with us. US-64 investors need not panic and redeem their units now on the fears of a lower net asset value, which will be announced in January, 2002."

The UTI Chief also expressed confidence saying the Sensex would cross the 4,000 mark some day to push up the NAV of US-64.

A top official of a leading PSU bank said the 'situation is grave' and the Reserve Bank should consider a rate cut now to infuse liquidity in the market.

"Some of the banks have reduced deposit rates. Lending rates are also low. RBI should now consider a rate cut," he said.

General Insurance Corporation foresees a rise in the reinsurance rate in India as international players have raised their premiums.

ALSO READ:
The UTI Crisis