January 2014

We have witnessed heightened volatility in most of the global markets in the past few weeks. Market like USA, Europe & Japan which were outperforming saw deep cuts of 6-7%. Most of the emerging markets also saw pressure on their markets and currencies. Indian markets were not spared either and witnessed a correction of 5% plus. In the middle of all this the RBI increased repo rate by 25 bps which created further volatility in the market. The only silver lining was that rupee behaved very well amidst global volatility and was one of the best currencies in emerging market peers.

There was not much to cheer on the street as the result season was muted. Pressure on corporate India was widely visible. Revenue growth is slowing down which is impacting operating leverage. We are focusing on companies which can tide through this difficult economic environment.

Next six months can be very eventful with elections being a game changing event. Also incrementally every result season and RBI policy will be keenly watched.