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Indian - Market Outlook

As autumn casts its vibrant hues and we step into the year's final quarter, the global economic landscape evolves in ways that defy expectations. Not long ago, the focus was firmly on India, with many expecting a surge in FPI flows. But China's unexpected stimulus announcement has swiftly redirected global attention and capital, leaving many scrambling to make sense of the shift. It’s almost ironic—what would have been truly insightful was predicting this pivot before it unfolded.

We see China as a distinct market; when opportunities are scarce elsewhere, investments often pivot to China, prioritizing immediate gains over long-term strategies, where the shift is driven more by necessity than choice.

Today the global economy stands at a crossroads defined by the normalization of inflation and the loosening of monetary policy. With the US Federal Reserve's recent interest rate cut and China's larger-than-expected stimulus, major economies are uniting in a concerted effort to foster GDP growth and navigate the complexities of today’s market landscape. Concurrently, oil prices have stabilized as traders evaluate the shifting risks tied to the ongoing crisis in the Middle East.

In India, SEBI has taken decisive action to tighten F&O rules in order to temper the frenzy in the derivatives market, coinciding with increased excitement in the primary market. Additionally, the Indian 10-year yield has exhibited notable volatility over the past three months, fluctuating between 7.1% and 6.70%, influenced by the US Federal Reserve's decisions and ongoing geopolitical concerns.

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