In focus with Tushar Pradhan - Sep 2022
Focus on domestic cyclical plays
26 September 2022
Summary
- August saw a mixed performance with Indian equity market ending positive for the second consecutive month while global markets declined as US Fed signaled for further rate increases
- On the economic front, India's headline CPI momentum further moderated to 6.71 per cent in July from 7.01 per cent in June. That said, this is the 7th consecutive month that the CPI data has breached the RBIs upper margin of 6 per cent
- Nifty earnings have seen a marginal correction post Q1 results largely due to volatile energy prices
- We continue to run high conviction strategies, with a cyclical tilt to be well positioned for the earnings growth and macro recovery cycle, holding a medium to long term view
- Macro data during the month was largely on expected lines. July CPI inflation came in at 6.7 per cent, in line with consensus. Industrial production and PMI data continued to affirm the ongoing growth recovery
- Shorter end of the curve up to 3 yr segment underperformed. 3 yr closed 3 bps higher at 6.78 v/s 6.75. Corporate bond curve showed flattening trend, similar to G-Sec curve, even as spreads between corporate bonds and G-sec compressed across most of the curve and remain at very low levels relative to historical averages