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Markets will soar after new govt takes office, says UTI chief

P S Subramanyam, chairman, the Unit Trust of India, by far the largest mutual fund in the country, has said that he is bullish about the stock market and that the rally in the infotech shares is in tune with the global valuations.

''I am optimistic and bullish on the market. It will certainly go up after the election results and formation of the new government,'' Subramanyam said in New Delhi on Monday, after a function for release of a book authored by a UTI official, Daljit S Nirman.

The UTI chairman justified the runaway rise in the shares of the infotech shares.''If you compare them with the global market, they are still undervalued. But if you compare them with other sectors of the domestic economy, maybe they are over-valued,'' he said.

The Sensex is riding high even in the midst of elections on the back of infoetch shares. The leader in this category, Infosys Technologies, yesterday hit a new high of Rs 7,074 commanding a market capitalisation of Rs 232.98 billion. The market cap of the IT sector has reached the highest among all the segments of the industry.

Investors do not seem to bother about the fact that despite seeing about 50 per cent growth in software exports, India is not a dominant player in the global market so far as the products are concerned.

''But India is soon going to be the number one player in software services in the world and that is what is driving the market around infotech shares,'' Subramanyam said.

He said whatever little uncertainty persists in the market in the midst of election process would clear and the Sensex is set to go up after the poll results next month.

While he shared concerns over the fiscal situation and the likely reversal in the inflation ration, Subramanyam has high hopes on the capability of the Reserve Bank of India and the finance ministry to tackle these issues.

UNI

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