Bullish on the market, fund managers have pegged economic growth at 6-7 per cent this fiscal with interest rates likely to remain moderate, the rupee emerging stronger and the Sensex crossing 7000.

"GDP growth expectations of fund managers for 2004-05 are converging to the 6-7 per cent band," says a survey of global fund manager Merrill Lynch.

"Since the last survey, there has been a distinct upward revision of expectations, with few fund managers also looking at GDP growth ending the year between 7 and 8 per cent," it said in its India Domestic Fund Manager Survey.

However, Merrill Lynch estimates GDP to grow by 6.2 per cent, which is in the consensus band.

Interest rate expectations have moderated significantly, given the sharp rise in yields from 5.75 per cent to 6.75 per cent, following the reverse repo rate hike to 4.75 per cent.

"No fund manager expects the 10-year yield to rise over 50 basis points," it said.

Most of the fund managers believe that rupee will appreciate against the US dollar and the exchange rate has veered to the strongest this fiscal.

On the market, Merrill Lynch said in the long term fund managers are more bullish and no one expects the Sensex to be below 6,200.

"A significant 64 per cent expect the Sensex to cross 7000, with 27 per cent expecting the Sensex to be 6600-6999 and 9 per cent expect it to be 6200-6599," it said.

Investor sentiment is bullish in the short term with majority fund managers expecting market to trade between 6,200 6,499 over the next three months, it added.