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The uncertainty extended | BNP Paribas Mutual Fund

The uncertainty extended

The week gone by has been fairly volatile with stock markets in India oscillating between the positive and negative zones throughout the week. Benchmark indices started the week on a positive note as expectations of another set of relief measures being announced along with a staggered lifting of the lockdown, gave a fillip to investor sentiment. However, weak global cues along with renewed concerns of liquidity in the Indian debt markets played spoilsport, dragging the markets down towards the end of the week.

Macro-economic Update

The macro-economic scenario in India remains bleak as companies struggle to survive in the absence of any economic activity. Amplifying their woes is the current liquidity environment which despite all the measures taken by the central bank remains tight. Taking stock of the current situation, Fitch Solutions has cut India's economic growth forecast for FY20- 21 to 1.8%. The rating agency expects private consumption to contract due to a large-scale loss of income in the face of worsening domestic outbreak of COVID-19. However, Fitch did say that the forecasts remain fluid and, even despite the recent downward revisions, they believe that the risks remain skewed to the downside.

Global Update

In the global commodities markets, Brent crude rebounded from two days of losses and US futures surged, bolstered by tentative talk of additional supply cuts from The Organization of the Petroleum Exporting Countries (OPEC) producers and US inventory builds that were less dire than some expected. Saudi Arabia said that it was ready to take extra measures along with other producers.

Institutional Activity

Institutional activity through the week was skewed to the negative as both foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) took to selling Indian equities. For the period 17th April 2020 to 23rd April 2020, FPIs net sold Indian equities worth INR 594 crores. DIIs net bought Indian equities worth INR 880 crore, in the same time period.

www.nseindia.com  | bloomberg.com

Disclaimers: The material contained herein has been obtained from publicly available information, internally developed data and other sources believed to be reliable, but BNP Paribas Asset Management India Private Limited (BNPPAMIPL) makes no representation that it is accurate or complete. BNPPAMIPL has no obligation to tell the recipient when opinions or information given herein change. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. Except for the historical information contained herein, statements in this publication, which contain words or phrases such as 'will', 'would', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. BNPPAMIPL undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. The words like believe/belief are independent perception of the Fund Manager and do not construe as opinion or advise. This information is not intended to be an offer to sell or a solicitation for the purchase or sale of any financial product or instrument. The information should not be construed as an investment advice and investors are requested to consult their investment advisor and arrive at an informed investment decision before making any investments. The Trustee, Asset Management Company, Mutual Fund, their directors, officers or their employees shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages arising out of the information contained in this document.

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