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Global markets have faced a variety of challenges, including concerns over short-term inflationary pressures and their implications for central bank policies, and despite expectations of Federal Reserve rate adjustments, market sentiment remains cautious, influenced by unsettling inflation data from the US and the European Central Bank's cautious stance on policy easing.

In Asia, divergent economic conditions, with Japan slipping into a technical recession and China grappling with deflationary trends, has impacted global equity markets. While the MSCI World index saw a modest uptick in February, the MSCI Emerging Markets index outperformed, driven by notable gains in China and Hong Kong. However, India's performance, though showing a slight increase in USD terms, has relatively underperformed compared to its EM peers.

Shifting focus to India Inc.'s performance in the last quarter, overall performance has been largely in line with expectations. Specifically, there has been a convergence of EBITDA with the top line, while PAT has held up relatively well.  Looking ahead, the earnings outlook for India Inc. remains satisfactory despite the headwinds of global growth and moderate rural demand. However, there may be a short-term impact on earnings due to the slowdown associated with elections. However, markets have responded positively to the robust earnings growth observed recently. As margins-led tailwinds diminish, earnings will need to be driven by improvements in revenue growth, sustained higher and secular growth will be the differentiating factor in the future.

Attached is the detailed monthly outlook for your reference. Request you to kindly attribute to Sumit Jain, Deputy Chief Investment Officer at ASK Investment Managers Ltd.

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