The Business Today-Morningstar Asset Allocation Survey gets projections from India's leading mutual fund houses on key indicators such as GDP growth, fiscal deficit and policy rate movements, and their views on sectors that look attractive from an investment perspective.
For the April-June 2013 quarter, the survey polled 13 fund houses. More than half (54 per cent) expect India's GDP growth to be less than six per cent in fiscal year 2014.
Over 92 per cent expect the country's fiscal deficit to remain in the range of 4.5 to 5.5 per cent in fiscal year 2014.
A majority of fund managers expect a repo rate between 7 and 8 per cent (it is at 7.5 per cent currently) over the coming year.
About 8 per cent of the respondents expect the RBI governor to cut rates by more than 75 basis points (bps) to below 7 per cent in that period.
About 69 per cent of fund managers see inflation between 7 and 8 per cent, the Reserve Bank of India's targeted levels at the end of 2013.
Over 90 per cent of the funds polled estimate a forward price-earnings ratio (P/E) of between 14 to 16 times for the Sensex in this period - it is now close to 17. P/E is the most common measure of how expensive a stock is
Most of the respondents believe the investment cycle in India will revive soon.
About half of the fund managers are neutral on gold and do not see the yellow metal touching a new high in 2013.
64 per cent see crude oil hovering between $90 and $110 per barrel in 2013.
No fund manager expects the rupee to drop below Rs 50 in 2013. Fifty per cent see the rupee hovering between Rs 50 and 55 against the US dollar in 2013, while the other half expect it to move above Rs 55 against the dollar in 2013.