Please click here for Monthly Equity & Debt Outlook Presentation – January 2022.

Key Events:

• Nifty (+2.18%) gained 2% in the final week of 2021 after remaining under pressure in December due to incessant FII selling in India.
• The MPC unanimously voted to keep the repo rate on hold, while maintaining the “accommodative stance” with a 5-1 vote. It reiterated its growth bias in policy as the Omicron variant poses risks for the global outlook.
• India’s manufacturing PMI hit 10-month high in Nov at 57.6, a jump from 55.9 in October. However, PMI for services dropped moderately to 58.1 in November from a ten-and-a-half-year high of 58.4 in October.
• GST revenue collected in December was over ? 1.29 lakh crore, 13 per cent higher than the same month last year.
• Headline CPI print for November came at 4.91%. The surprise was driven by weaker than expected Food & Bev ex Vegetable inflation.
• The central government’s fiscal deficit as of Nov end was 46.2% of the annual budget. Total receipts at November end were Rs13.78 trn
• FIIs recorded the longest selling streak in last 10Y (26 days) with them being net sellers to the tune of -$1.7bn in Dec (YTD +$3.8bn) even as DII buying continued +$4.3bn (YTD +$12.7bn), driven by both MFs ($2.5bn) and Insurance (+$1.2bn)

Please click here for Monthly Equity & Debt Outlook Presentation – Dec 2020 

Key Events:

• Nifty (+11.4%) rallied sharply in November, as a global risk-on triggered by a Biden victory, positive vaccine developments and dollar weakness (DXY fell by ~2.3% in Nov) led to strong inflows into EM markets
• FIIs pumped in ~$9.4bn into India equities (highest ever monthly net inflows) partly driven by MSCI rebalance, as >$2bn of passive inflows were expected due to increase in Foreign Ownership Limits in various stocks
• DIIs on the other hand, continued to remain net sellers including Domestic MFs as equity funds witnessed fourth consecutive month of net outflow in October as redemptions grew 20% vs September
• Deceleration in real GDP growth moderated to -7.5% y/y in 2Q (vs -23.9% in 1Q). Rebound was led by manufacturing (+0.6% y/y vs -39.3% in 1Q) while subdued govt. spending dragged growth
• CPI spiked to 7.6% in October, highest print since May’14 while core CPI also rose slightly to 5.8%. While inflationary pressures were broad based, food items led the sharp jump, partly due to unseasonal rains
• Govt’s latest measures focused on urban consumption, infrastructure and Covid-affected sectors. Moreover, loan guarantee scheme was extended to 26 stressed sectors and healthcare
• RBI released a pro-growth monetary policy decision. Kept Repo and Reverse Repo rate unchanged

Please click here for Monthly Equity & Debt Outlook Presentation – September 2020.

Key Events:

·         1Q FY21 Real GDP growth contracted by 23.9% YoY, weaker than the street estimates. Led by a strict lockdown and labor migration, construction was the worst hit, followed by trade, hotels, transport and communication. 

·         MPC took a pause in the rate easing cycle while refraining from giving any specific forecasts on growth & inflation given heightened uncertainty.

·         July’s CPI print of 6.9% (v/s 6.2% in June) drastically reduced chances of a rate cut for the rest of this fiscal year. RBI’s recent policy statement had predicted inflation to stay elevated till Sep and see moderation in 2HFY21.

·         India’s trade balance turned to a deficit of ~$4.8bn in July are a rare surplus of ~$0.8bn in June, as gold and other imports started to pick-up. Exports in July were down ~10% in July at $23.6bn while imports at $28.4bn.

·         India’s fiscal deficit stood at Rs8.2trn at the end of July, at ~103% of the budgeted target for the current fiscal year. Sharp fall in tax receipts coupled with resilient government expenditure led to the high deficit in the period.

·         After an erratic July, August witnessed excess rainfall of 26%, highest print since 1901. Rainfall is already at a record in states of Maharashtra, Madhya Pradesh, Gujarat, and Odisha.

·         Indian Equities moved slightly higher (Nifty +2.8%) in August.