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India Strategy - The Eagle Eye : April 2021

India outperforms EMs in Mar’21, gains 76% in one-year

* India outperforms EMs in Mar’21

* Defensives make a comeback as Staples and Technology outperform

* Average daily cash volumes fall 19% MoM as implementation of the second phase of peak margins impacts volume

Economy

* GST collections in Mar’21 at record highs

* Current account slips into deficit in 3QFY21 on the back of higher merchandise trade deficit

Markets

* Defensives back in favor as the second wave of COVID-19 impacts economic activity

* Nifty EW outperforms Nifty by 16pp in FY21

* Midcaps and smallcaps outperform Nifty in nine out of 12 months in FY21

Covid-19

* The spread of the second wave is faster than the first wave

* Pace of vaccination picking up and has crossed 80m doses in India

Reflationary Growth

The rise in borrowing costs for AAA and AA rated corporates since the beginning of CY21

* Commodity price inflation led to an increase in US bond yields as the global economy is poised for strong growth in CY21

Valuations, Flows

* Market capitalization-to-GDP ratio at a 10- year-high

* FII inflows continue in Mar’21, stands at USD3b

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