India remains a good choice with global investors

A good base of April-May 2020 is entirely reflected in the TTM return. However, the S&P BSE Sensex routine was bad than the increased market indices in particular Dow Jones business Average and S&P 500. This is appreciated by 2.7% and 5.2% respectively during the month.

Long-term investors must stay put and use a staggered method for investment towards their equity allocation.  The most recent S&P BSE Sensex has declined by 1.45% on the entire return basis in April 2021. Equity Markets have shown the best resilience regardless of the lockdown in so many states across the country. The index has returned 46.26% on a trailing 12-month basis.

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An outstanding vaccine proliferation in the United States ends in more confidence in its economic recovery and such thing is getting reflected in the US equity markets. The broader market did improve than the BSE Sensex last month. The S&P BSE small-cap index increased by 4.97% and S&P BSE midcap index increased by 0.69%. Metals and healthcare were the successful sectors in this period.

The complete resurgence of Covid-19 has successfully brought the entire focus back on the healthcare sector where as metals have positively reacted to the up move in the global commodity costs. Real estate stocks and capital goods are underperformed because of the state-level lockdowns made almost every investor nervous regarding its entire impact on the near-term prospects of their business.

Foreign flows have come to a pause

The overall Indian equities have notably seen $1.6 billion of net selling by all the foreign investors in the last month. This is the first thing after September 2020 that FPIs turned negative each month. FPI inflows stand at $5.5 billion on an YTD basis. DIIs have been successful buyers in the last month.

The economic recovery of the nation can face upcoming headwinds because of the second wave of Covid-19 and consequent lockdowns. These things end in short period FII hedge funds and pull out wealth from Indian markets.

The nominal GDP growth of the nation will be better than the western world in the medium and long-term. This makes it a good destination for yield as well as growth-seeking medium and long-term global investors.

Equity markets have shown some resilience because of the resurgence of Covid-19 and lockdown on the economic actions. Though the lockdown is localized this time, corporate balance sheets are good and their focus is on the debt reduction and liquidity.


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