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Sensex fall is a short-term phenomenon: Templeton chief

The freefall in stock market indices is a short-term phenomenon, driven primarily by emotional sentiments due to the economic sanctions imposed on India and the Union Budget not being able to meet the market's expectations.

Echoing these sentiments at a media conference today were Franklin Templeton Funds Chairman Charles Johnson and Templeton India CEO Vijay Advani. ''Since stock prices are driven by sentiments it is impossible to make any predictions, in the short run,'' Advani remarked.

The duo, however, conceded that the long-term prospects auger well for the economy and the financial markets on account of two reasons. Firstly, the Budget is a continuation of the liberalisation process. Secondly, the sanctions will not affect private sector investment in the country.

''The impact will be felt by government-funded projects, though this would be short-term in nature,'' said Advani.

He said Templeton believes in the ''early entry, early exit'' motto, while at the same time adopting a long-term strategy in managing funds.

Johnson said Templeton has an exposure of about $ 800 million in the Indian markets. ''Two-and-a-half years back the exposure was $ 30 million,'' he remarked, adding that this shows that the fund has not reduced its exposure in the country.

UNI