Reference Auto

Is the Sensex on an upward march again. After all, even though the Indian festival season ended last month (with Diwali), the bourses are heading towards their usual high during another peak season — Christmas and the New Year.

At this time, there is a lot of buying activity by retail customers and almost every business remains buoyant, which usually prompts the stock markets to remain upbeat. Marketmen are so bullish that they feel the Sensex and other key indices will rise by at least 10-15 per cent in the next one year.

The BSE benchmark index, the Sensex, reversed three weeks of losses last week and ended with 830 points gain on buoyant global and domestic economic data.

There were a host of other encouraging triggers as well that lifted the bourses. As usual, the bourses are likely to remain volatile. The annoucement of a $115-billion rescue package for Ireland, which was reeling under a huge debt burden, had given a fillip to the markets.

Also, the encouraging GDP numbers (the GDP growth of 8.9 per cent), robustness in the services sector and rise in merchandise exports have also boosted stock market sentiment.

There were many takers for state-run manganese producer MOIL’s IPO. This spurred buying in PSU stocks. The IPO was subscribed 56 times, of which retail subscription was 38.6 times. Furthermore, the government’s move to recapitalise nine PSU banks and a proposal to dlilute 10 per cent stake in Neyveli Lignite revved up sentiment.

ONGC was the highest gainer that saw seven per cent growth at Rs 1,320 following the government’s  go-ahead for its bonus-cum-stock split proposal.

Inflation also eased to single-digit for the first time since nearly six months. This could taper food prices and force the Reserve Bank to shun the idea of money tighteniing.

Last week, Tata Motors was up nearly 13 per cent and remained the top gainer. Some major companies that saw stock prices go up are Reliance Industries, Hindalco, SBI, Reliance Communications, DLF, Mahindra and Mahindra, Wipro, Bhel and ICICI Bank.

It’s that time of the year when companies ask their employees to chalk out tax-saving investment plans. There are myriad tax-saving instruments where funds can be parked. They include LIC schemes, post office savings schemes, mediclaim, various tax-saving or infrastructure bonds and mutual funds.

For those who prefer to play it safe with instruments such as the National Savings scheme, here is our take. If the rate of interest is eight per cent and inflation is also, say, eight per cent, then the real rate of interest is zero. That means, the value of money invested will remain the same and the actual gain in monetary value will be zero.

The most lucrative among tax-saving instruments are mutual funds. But like we said earlier, if someone wants to reap benefits from mutual funds, the investor has to stay invested for at least five years. Valueresearch.com provides good leads as to where one can put in money.

Thus, it makes sense to invest in mutual funds. Some lucrative schemes that could probably give the highest returns among tax-saving schemes are: HDFC Long Term Advantage, HDFC Tax Saver, Reliance Tax Saver, Fidelity Tax Advantage and Canara Robecco Equity Tax Saver.