Market

Macroscope
May 2024

Investment Products
Index

Contents Page No

From the MD & CEO’s Desk ..…………………………………………………….. 1

Equity Outlook ……………………………………………………………………… 2-9

Fixed Income Outlook………………………………………………………………. 10-12

Research Spotlight……………………………………………………………......... 13-15

The Reading Room ………………………………………………………………… 16-17

Dots to Join………. ………………………………………………………………… 18-20

Index Performance ……….………………………………………………………… 21

Macro Economic Indicators ……………………………………………………….. 22-23

IE & IHP Small Case Baskets ………………………………………………….…. 24-28

Crossword ………...………………………………………………………………… 29

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024

From the MD & CEO’s desk
Dear Investors,

In light of the recent significant run-up in equity markets, we've received

inquiries from investors concerned about whether they may have missed
out on opportunities. However, we firmly believe that the journey is far from
over. There are compelling opportunities, particularly when considering the
enduring themes that are set to shape India's economic landscape for years
to come.
It is natural to experience fluctuations and volatility in the short term.
However, it is crucial to maintain a consistent focus on the long-term
horizon, where the true potential for growth and returns lies. Trust Charlie
Munger to say it as it is.

“This great emphasis on volatility in corporate finance we regard as nonsense."

- Charlie Munger

Despite any temporary market turbulence, history has consistently shown that equity markets have
rewarded investors who remain patient and committed to their long-term investment strategies.
Varun Lohchab, Head of Research of institutional equities at HSL, along
with his team has diligently identified several long-term themes that are
poised to shape India's market landscape positively well into the future,
potentially extending beyond 2030. These themes represent structural shifts
in various sectors of the economy, which are inherently aligned with India's
growth trajectory. By pinpointing these trends, we have also identified
companies positioned to thrive within these themes, thus offering our clients

AI Generated
the opportunity to capitalize on these compelling investment prospects. We
are confident that the companies we have selected not only stand to benefit
from these long-term trends but also have the potential to deliver attractive
returns for our clients over the years to come.

Additionally, you will find all our regular articles in this Macroscope:
• Equity outlook: Varun Lohchab shares the key long-term themes for India’s growth trajectory and
the investment ideas emerging from the same.
• Macroeconomic and Equity Markets recap: Summarizes key macroeconomic data published last
month and a recap of the movements in the global equity markets.
• Debt Outlook: This section includes key inflation releases, central bank policy actions and bond
market movements.
• Reading Room: Some of the interesting essays we read this month.
• Research Spotlight: Small selection of some of our best research.
• Crossword: A fun and exciting brainteaser to challenge yourself
We are confident that you'll continue to find immense value in our Macroscope as a tool for enhancing
your investment endeavours. By leveraging the insights provided by the Macroscope, we're continually
striving to enhance your investment returns and foster a deeper understanding of the dynamic forces
shaping the investment landscape. Your success remains the key objective of our efforts.

Warm regards
Dhiraj Relli
MD and CEO – HDFC Securities

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 01

Equity Outlook

Equity outlook by Varun Lohchab, Head of Research, Institutional Equities at HDFC Securities:

I along with my team recently published a report titled “Long term

compounders: Decadal economic trends present opportunities”. It
presents the long term bull case for investing in Indian equities as well as
identifies stocks which will benefit from these secular themes. Do go through
the detailed research report, to understand the rationale for the stocks
benefitting from the above trends. Presented below are some excerpts from the
report:

India’s GDP is expected to double from its current level of USD 3.57 trn (in FY24E) to USD 7trn in
2030. This will be a result of inherent demographic advantages along with consistent policy support.
We observe that there are decadal economic trends underway in the country, which are fueling the
business growth of companies in various sectors. These trends are:
• Rising discretionary spending pool and premiumization: The middle class of the country is
expected to get more populous and richer, driving demand for discretionary goods and services.
From 158 mn households in 2018, the middle class is poised to grow to 300 mn by 2030,
representing 78% of overall households.
• Formalization of the economy: Low-ticket discretionary sectors have a higher presence of
unorganized players. However, consolidation is underway, led by factors such as rising affordability,
technology upgradation, GST, RERA, e-way bill, internet penetration and the recently launched
ONDC. This consolidation process is expected to benefit organized players across multiple sectors.
• Digitization: Internet penetration and data consumption in the country have climbed up very fast
led by declining data costs. This has fueled the ambitions of aspiring entrepreneurs and given rise
to a blossoming startup ecosystem (114 Unicorns so far). Policy supports such as UPI and ONDC
are key reinforcing catalysts for these businesses. New age business models will continue to gain
prominence and disrupt incumbents using the digital India stack.
• Financialization of savings: Rising financial literacy and pursuit of higher IRR with liquidity are
leading investors to move away from real estate/ FDs to more sophisticated asset classes such as
MFs, equity, LI, PMS/AIF/private credit and derivatives. Despite cyclical market volatility,
Asset/wealth management, market intermediaries will continue to see healthy trend growth rates.
• Capex/infrastructure investments: The central government has been focusing on investment-led
GDP growth in the country. Its impact can be witnessed in the sectors of defense, roads, railways,
and renewable energy. Further, it aims to nudge the private sector to invest in capex, given their
healthy balance sheets and optimistic long-term demand outlook. Electric vehicles, manufacturing,
alternate energy and semiconductors are sectors with expected capex rise. Thus, sectors like
capital goods, infrastructure and cement will benefit from the current capex cycle.
• Green energy adoption: India is on the cusp of shifting to a green energy ecosystem from a fossil
fuels-dominated one. This will involve green energy capacity creation of 340 GW by 2030 at a
projected expenditure budget of INR 20 trn. Renewables (Solar, Wind), Green hydrogen and EV are
key beneficiaries.
• Manufacturing/China plus one: India can benefit immensely as global companies aim to diversify
their supply chain and manufacturing away from China due to geopolitical tensions, trade war and
rising labour costs. While it is a large lucrative growth opportunity, India must compete with other
Southeast Asian countries to get its share in the business of the global giants. Auto ancillaries,
Chemicals, Textiles, and Electronics manufacturing remain well poised to benefit from this trend.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 02

Equity Outlook

To benefit from the tailwinds of the above-mentioned trends, we have identified a list of stocks from our
coverage universe which can compound their earnings consistently over the next 3-5 years while
maintaining healthy return metrics and balance sheets.

Recommended Stocks
Multi- Cap Stocks Mega-cap Stocks
SBI Life Insurance Reliance Industries Ltd
Tata power company ICICI Bank Ltd
Cholamandalam Investment & Finance Company Larsen & Toubro Ltd
Voltas Maruti Suzuki Ltd
Dalmia Bharat NTPC Ltd
Brigade Enterprises Ultratech Cement Ltd
MCX India Siemens Ltd
Amber enterprises India
Happiest Minds Technologies
Neogen Chemicals

Access the full report here: https://www.hdfcsec.com/hsl.docs//Long%20term%20compounders%20-%20HSIE-

202404161446074848939.pdf

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 03

Equity Outlook

Macro Economic Updates:

Global Macro summary: Markets and the US Fed were concerned that inflation was not making
progress towards the Fed’s target of 2%. This resulted in an increase in US bond yields and a fall in
equity markets. At the same time, US GDP growth numbers were weaker than expectations. Inflation
made more progress in the Eurozone area and the ECB remains on track for a first rate cut in June.
India’s lead indicators including GST collections, power consumption, IIP and PMI readings remained
strong in April. India election results will be declared on June 4, 2024 and may impact the future course
of markets.
United States: GDP growth moderating but concerns emerged that US inflation may have stopped
declining which led to higher bond yields and may force US Fed to defer rate cuts.
US GDP Growth: US GDP increased at an annualized rate of 1.6% QoQ in Q1CY24 vs 3.3% QoQ in
Q4CY23. Economists polled by Reuters forecasted GDP advancing at an annualised rate of 2.4% QoQ
in Q1CY24.
US Inflation higher than expected:
• US CPI came in at 3.5% in March 2024 after an increase to 3.2% YoY in Feb-2024 and was
marginally higher than expectations of 3.4%. Core CPI also came in at 3.8% in Mar 2024, higher
than expectations of 3.7% and but same as in Feb 2024.
• US PCE price index rose by 0.3% MoM in Mar-24 same as Feb-24 and in line with estimates. On a
YoY basis, US PCE price index rose by 2.7% in Mar-24 vs 2.5% in Feb-24. Economists polled by
Reuters forecasted the US PCE price index to rise by 2.6% YoY for Mar-24
• US Core PCE index rose by 0.3% MoM in Mar-24 same as Feb-24 and in line with estimates. On a
YoY basis, US Core PCE price index rose by 2.8% in Mar-24 same as Feb-24. Economists polled
by Reuters forecasted the US Core PCE price index to rise by 2.6% YoY for Mar-24

US Consumer spending and retail sales remain robust:

• US Consumer spending increased by 0.8% MoM in Mar-24 same as Feb-24. Economists polled by
Reuters forecasted the US Consumer spending to rise by 0.6% MoM for Mar-24
• US Retail sales rose by 0.7% MoM in Mar-24 vs a rise of 0.9% in Feb-24. Economists polled by
Reuters forecasted retail sales would rise by 0.4% MoM for Mar-24
• US Core retail sales rose by 1.1% MoM in Mar-24 - biggest gain since Jan-23 vs a rise of 0.6% in
Feb-24. Economists polled by Reuters forecasted core retail sales would rise by 0.5% MoM for Mar-
24

US flash Composite PMI Output Index fell to 50.9 in Apr-24 from 52.1 in Mar-24. US flash
manufacturing PMI slipped to 49.9 in Apr-24 from 51.9 in Mar-24. US flash services PMI dipped to 50.9
in Apr-24 from 51.7 in Mar-24

US Monetary policy meeting: The US FOMC kept key policy rates unchanged at its April 30-May 1st
meeting. The US FOMC noted “lack of further progress” on inflation towards its 2% objective and noted
that the FOMC does not expect to reduce rates till it has greater confidence that inflation is moving
towards its target. Federal Reserve Chairman Jerome Powell in an interview ruled out a rate hike as its
next step and played down stagflation concerns.

US treasury yield movement: US 10-year bond yields are currently trading at 4.59% (as of May 2,
2024) up from 4.21% as of March 29, 2024. Recent strong inflation readings and comments from US
Fed’s FOMC members suggested that rate cuts would be delayed resulting in a sharp increase in
yields.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 04

Equity Outlook

US unemployment rate dipped to 3.8% in March 2024 from the previous month's two-year high of
3.9% and surprising market expectations, which had forecasted the rate to remain unchanged.

ADP non-farm payrolls: Private payrolls increased 192,000 last month after an upward revision to the
prior month, according to figures published by the ADP Research Institute. The median estimate in a
Bloomberg survey of economists called for a 183,000 gain.

US job openings: The number of job openings declined by 325,000 from the previous month to 8.488
million in March 2024, reaching the lowest level since February 2021 and missing the market
consensus of 8.690 million

US GDP increased at an annualized 1.6% QoQ, far lower US CPI increased marginally to 3.5% YoY in Mar’24,
than consensus expectation of 2.4% marginally higher than expectations of 3.4%
8 7 7 6.4
6.3 7.0
4.9 6.0
6 6.0
2.7 2.7 2.6 2.2 2.1 3.2 5.0 4.9
4
1.6 5.0 4.1
2 3.7 3.7 3.5
0
4.0
3.0 3.2 3.2 3.1 3.4 3.1 3.2
3.0
-2 -0.6
-1.6 2.0
-4

Dec-23
Jun-23

Nov-23
Jul-23

Oct-23
Feb-23

Apr-23

Sep-23

Feb-24
Mar-23

May-23

Aug-23

Mar-24
Jan-23

Jan-24
Q1 CY21
Q2 CY21
Q3 CY21
Q4 CY21
Q1 CY22
Q2 CY22
Q3 CY22
Q4 CY22
Q1 CY23
Q2 CY23
Q3 CY23
Q4 CY23
Q1CY24

Source: US Bureau of Labor Statistics Source: tradingeconomics.com

US Unemployment rate came down after a surprise rise in US Retail Sales MoM (%) : increased 0.7% MoM as
Feb compared to previous month’s increase of 0.9%
2.8
4 3.9 3.0
3.9 3.8 3.8 3.8 3.8
3.8 3.7 3.7 3.7 3.7 2.0
3.7 3.6 3.6
1.0 0.4
0.7 0.6 0.7 0.8 0.6
3.6 3.5 3.5 0.2 0.3 0.4
3.5 3.4 3.4
3.4 0.0
3.3 -0.3
3.2 -1.0
-0.7 -0.9
3.1 -1.1
-2.0
Jun-23

Nov-23
Dec-23
Jul-23

Oct-23
Feb-23

Apr-23

Sep-23

Feb-24
May-23

Aug-23
Jan-23

Mar-23

Jan-24

Mar-24

Jun-23

Nov-23
Dec-23
Jul-23
Feb-23

Sep-23
Oct-23

Feb-24
Apr-23

Aug-23
Jan-23

Mar-23

May-23

Jan-24

Source: tradingeconomics.com Source: tradingeconomics.com

Europe:

Euro zone: Euro zone inflation continues to decline, Services activity rebounds even as manufacturing
continues to struggle. ECB rate cut likely in June.
• The annual inflation rate in the Euro Area remained at 2.4 percent in April 2024, in line with market
expectations, preliminary estimates showed.
• The core inflation rate, a crucial underlying measure that filters out volatile food and energy prices
cooled to 2.7 percent, down from March's 2.9 percent.
• Eurozone flash services PMI rose to 52.9 in Apr-24 from 51.5 in Mar-24, and against 51.8 expected.
But, Manufacturing PMI dropped to 45.6 in Apr-24 from 46.1 in Mar-24, against 46.6 expected. It has
been below 50 since mid-2022

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 05

Equity Outlook
• UK Composite PMI jumped to an 11-month high of 54.0 in Apr-24 from 52.8 in Mar-24. UK Services
PMI rose to 54.9 in Apr-24 from 53.1 in Mar-24, while UK Manufacturing PMI unexpectedly fell to 48.7
in Apr-24 from 50.3 in Mar-24
• UK CPI rose by 3.2% YoY in Mar-24, down from a 3.4% increase in Feb-24. The Bank of England
and economists polled by Reuters forecasted an annual rate of 3.1%. On a MoM basis, CPI rose by
0.6% in Mar-24 same as previous month
• UK Core CPI moderated to 4.2% YoY in Mar-24 from 4.5% in Feb-24. The Reuters poll forecasted an
annual rise of 4.1%. On a MoM basis, core CPI rose by 0.6% in Mar-24 same as previous month
Euro Area Inflation remained at 2.4% YoY in April 2024 in line with expectations
10 8.5
8 6.9 7.0
6.1
5.5 5.3 5.2
6 4.3
4 2.9 2.4 2.9 2.8 2.6 2.4 2.4
2
0
Jun-23

Nov-23
Dec-23
Jul-23

Oct-23
Feb-23

Apr-23

Sep-23

Feb-24

Apr-24
May-23

Aug-23
Mar-23

Jan-24

Mar-24

Source: tradingeconomics.com

China:
• China's Q1 GDP grows 5.3% y/y, beating analysts' expectations. Analysts polled by Reuters had
expected first-quarter gross domestic product (GDP) to expand 4.6% from a year earlier, compared to
5.2% in the previous three months.
• China's March industrial output grew 4.5% from a year earlier, slowing from the 7.0% pace seen in
the January-February period and came in below expectations for an increase of 6.0% in a Reuters
poll of analysts.
• China Retail sales, a gauge of consumption, jumped 3.1% in March, slowing from a 5.5% increase in
the January-February period. Analysts had expected retail sales to grow 4.6%.
• China’s Manufacturing PMI fell to 50.4 in Apr-24 from 50.8 in Mar-24 and above the median forecast
of 50.3 in a Reuters poll. Non-manufacturing PMI fell to 51.2 in Apr-24 from 53 in Mar-24, below the
median forecast of 52.2. Composite PMI fell to 51.7 in Apr-24 from 52.7 in Mar-24
• People's Bank of China (PBoC) kept the 1 yr Loan prime rate unchanged at 3.45% and 5 yr Loan
prime rate at 3.95%

India:

Economic growth indicators remain strong even as inflation stays within the RBI’s target band
• GST collections hit a record Rs. 2.1 lac cr, increasing by 12.4% YoY, compared to Rs. 1.78 lac cr in
March. GST revenue net of refunds increased by 15.5% YoY.
• India Inflation eases: India’s CPI inflation eased to 4.85% in March compared to 5.09% in Feb. This
was the lowest CPI reading in 10 months. Core inflation, which excludes volatile food and fuel items,
continued to decelerate in March to 3.25 per cent from 3.5% in Feb even as F&B inflation dipped only
marginally to 7.7% from 7.8%. Retail inflation in the March quarter was the lowest in 12 quarters.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 06

Equity Outlook

• India’s Wholesale Price inflation (WPI) rose to a three-month high of 0.53% in Mar due to an
increase in the prices of food, electricity, crude among others compared to 0.33% and 0.20% in Jan
and Feb.
• Reserve bank of India kept its key policy rates unchanged at its meeting in early April and
maintained its policy stance as “withdrawal of accommodation”.
• The Index of Industrial Production (IIP) in India rose 5.7% in Feb as against a revised 4.1% in Jan.
IIP in December 2023 was recorded at 4.2 per cent.
• The HSBC Flash India Composite PMI Output Index rose to 62.2 in April compared with 61.8 in the
previous month. This reading was the highest in 14 years.
• HSBC India Services PMI was at 61.7 in April 2024 and compared to a reading of 61.2 in Mar’24.
• Normal Monsoon projected: Both the India Meteorological department (IMD) and SKymet predicted
a normal monsoon for India in 2024 as La Niña kicks in. The IMD forecast “above normal” rain for the
June-September monsoon, boosting prospects of a bountiful agricultural harvest that will likely ease
inflationary pressure and bolster growth. This follows uneven rain in 2023, mainly due to the El
Niño effect, which led to patchy farm output, increased food prices, and kept the central bank
from cutting interest rates.
• Bank loan growth continues to be strong with value of loans increasing by 19.9% YoY in the
fortnight to April 5, 2024 compared to 20.2% YoY growth in the fortnight to March 22, 2024
GST Collection (Rs Lac cr) India’s CPI Inflation monthly trend

10.0 3.5
9.0 7.4 3.0
2.1 8.0 6.8 2.5
1.9 7.0 2.0
1.6 1.7 1.6 1.61.7 1.7 1.7 1.7 1.7
1.8 5.7 5.6 5.7 5.1 5.1
1.5 1.6 1.6 6.0 4.7 4.3 4.9 5.0 4.9 4.9 1.5
5.0 1.0
4.0 0.5
3.0 0.0
2.0 -0.5
1.0 -1.0
0.0 -1.5
Jun-23

Nov-23
Dec-23
Jul-23

Oct-23
Apr-23

Sep-23

Feb-24
May-23

Aug-23
Mar-23

Jan-24

Mar-24
Jun-23

Nov-23
Dec-23
Jul-23

Sep-23
Oct-23
Feb-23

Apr-23

Aug-23

Feb-24

Apr-24
Mar-23

May-23

Mar-24
Jan-24

CPI YoY (LHS) CPI MoM (RHS)

Source: PIB Source: MoSPI

Global Equities Markets:

Major Indices Returns (April 2024)
Hongkong 7.38%
In the month of April 2024, global equity Russia 4.78%
markets witnessed weakness across China 3.48%
developed and emerging markets. Vietnam, UK 2.41%
India- Nifty 50 1.25%
Korea and Nasdaq were among the biggest Taiwan 1.24%
losers declining by 9.7%, 8.1% and 4.4% Indonesia -0.07%
respectively (local currency). The key Thailand -0.17%
concern for the markets was the recent Brazil -1.70%
France -2.69%
inflation numbers in the US which had not
Australia -2.95%
declined as much as the market was hoping Germany -3.03%
for. This pushed out expectations of a rate US-S&P 500 -4.01%
cut by the US Fed in June and the US 10- Japan -4.39%
year bond yields spiked. Hong Kong, Russia Nasdaq -4.41%
South korea -8.11%
and China bucked the trend with gains of Vietnam -9.73%
7.4%, 4.8% and 3.5%.
Source: investing.com. Returns in local currency
MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 07
Equity Outlook

Indian Equities:
• Nifty-50 gained 1.25% in Apr’24 and outperformed major developed market indices like US S&P 500
(-4.0%), Nasdaq (-4.4%) and Japan (-4.4%). The broader markets were even stronger bouncing back
form the correction witnessed in end Feb and early March. BSE Midcap and BSE Small cap indices
rose by 7.1% and 9.6%, respectively during April;24.
• In April 2024 major sectoral gainers included Nifty Metal, Nifty PSU Bank and S&P BSE Consumer
Durables which gained 7.4%, 7.2% and 5.6% respectively. Among sectoral losers, Nifty IT and Nifty
Media fell by 5.2%, and 1.1% respectively.
• Indian Sectoral Indices YTD: PSU Banks, Oil & Gas and Realty indices have led the rally so far in
CY24 while media, IT, FMCG and Private bank sectoral indices have underperformed the markets.

Sectoral Indices Returns (April 2024)

NIFTY METAL 7.4%
NIFTY PSU BANK 7.2%
BSE Consumer Durables 5.6%
BSE Power 5.4%
S&P BSE Telecom 5.2%
S&P BSE OIL & GAS Index 4.8%
NIFTY AUTO 4.6%
S&P BSE Private Banks 4.5%
NIFTY BANK 4.0%
NIFTY REALTY 3.7%
Nifty Financial Services 2.9%
NIFTY Infrastructure 1.8%
NIFTY MEDIA 1.6%
NIFTY FMCG 0.5%
NIFTY PHARMA -1.1%
NIFTY IT -5.2%

Flows:
DIIs remained net buyers of Indian equities in cash market for the ninth consecutive month in April 2024
with net purchases of Rs. 44,186 cr in Apr’24 following on from record purchases of Rs 56,311 crore in
Mar’24. FIIs turned net sellers again in Apr’24 with net sales of equities in cash of Rs. 35,692 cr after
being buyers in Mar’24 with net purchases of Rs. 3,314 cr in cash.

IPO Review:
April '24 witnessed muted primary market activity as only 3 companies came out with an IPO/ FPO to
raise an aggregate amount of Rs. 22,924 cr. Vodafone Idea’s FPO of Rs. 18,000 cr received strong
response from institutional investors and was oversubscribed 7x. In terms of listing gains, JNK India
listed with gains of 49% followed by Bharti Hexacom’s listing gains of 32.5%

Listing date % Inc/ Overall QIP

Size of IPO Issue close IPO price open (Dec) from Subscription Subscription
Name of the company (Rs. Cr) Date (Rs./share) (Rs./share) issue price (times) (times)
Bharti Hexacom Limited 4275 5-Apr-2024 570.0 755.0 32.5% 29.9 48.6
Vodafone Idea Limited FPO 18000 22-Apr-24 11.0 12.4 12.7% 7.0 19.3
JNK India 649 25-Apr-24 415.0 621.0 49.6% 28.5 74.4

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 08

Equity Outlook

Key Risks:

Geopolitical conflicts remain a key risk. Last month, Iran attacked Israel with over 300 missiles and
drones in response to Israel’s bombing of the Iranian consulate in Syria killing several members of the
Iranian Revolutionary Guard including a senior commander. Israel was able to shoot down most of the
drones and missiles and the attack did not result in any significant damage. In retaliation, Israel also
launched several missiles on Iran. At the moment, the conflict appears to be contained with neither side
trying to escalate the conflict.

Indian Election results will be declared on June 4th but the exit polls will likely be available from the
evening of June 1st. The market is pricing in a return of the current government. Any surprising results in
the elections could have an impact on the markets.

Elevated valuations remain a key risk particularly in the mid and smallcap stocks. Domestic inflows have
taken the markets higher even as the FIIs continue to sell. Any change in domestic sentiment will have a
sharp impact on the markets.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 09

Fixed Income Outlook
India 10-Year G-Sec Yield Movement
• 10yr G-sec yield rose by 9 bps to 7.15% in Apr’24 from 7.06% in Mar’24.
• During the month, 10yr yield traded in the range of 7.06-7.16%.
• RBI announced new 10yr G-sec in Apr’24 at a coupon rate of 7.1%.
India’s 10 yr G-sec yield movement in last 3 months India’s G-sec yield curve continues to remain flat
7.40 7.5
7.30 7.0
7.20 6.5
7.14
7.10 7.15
6.0
7.00
5.5
6.90
5.0
06-Feb-24
12-Feb-24
18-Feb-24
24-Feb-24

06-Apr-24
12-Apr-24
18-Apr-24
24-Apr-24
30-Apr-24
31-Jan-24

01-Mar-24
07-Mar-24
13-Mar-24
19-Mar-24
25-Mar-24
31-Mar-24

1yr 2yr 3yr 4yr 5yr 6yr 7yr 8yr 9yr 10yr12yr14yr20yr

29-Apr-22 29-Mar-24 30-Apr-24

Source: Investing.com Source: Bandhan MF, Bloomberg

RBI’s Monetary Policy Meeting: Key Highlights

• RBI’s MPC decided to keep the repo rate unchanged at 6.5% with a
5:1 vote in Apr 2024 meeting.
• The MPC also kept the policy stance unchanged and decided to
remain focused on “withdrawal of accommodation” with a 5:1 vote.
• RBI remained optimistic on growth and said this provides space for
monetary policy to remain tight.

AI Generated
• RBI showed some comfort in the disinflationary process that is
underway - particularly in core inflation.
• RBI’s FY25 Projections: GDP growth – 7.0%; CPI inflation – 4.5%.

Tracking India’s Economic Pulse

• GST Collection: India’s GST collection rose to a record high of Rs. 2.1 lakh cr (up 12.4% YoY) in
Apr’24 vs. Rs. 1.78 lakh cr in Mar’24.
• PMI: India’s Manufacturing PMI fell to 58.8 in Apr’24 from a 16-year high of 59.1 in Mar’24.
• Core Sector Performance: India’s eight core sectors grew by 5.2% YoY in Mar’24 vs. 7.1% in
Feb’24

Regulatory Announcement
• SEBI has decided to reduce face value of corporate bonds to Rs. 10,000 from Rs. 1 lakh.
• Earlier in Oct’22, SEBI had reduced face value of corporate bonds to Rs. 1 lakh from Rs. 10 lakh.
• As per market experts, reduction in face value will make bond investments more appealing and
attainable for a broader spectrum of retail investors.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 10

Fixed Income Outlook
Banking System Liquidity Dynamics India’s banking system liquidity (Rs cr)

• India’s banking system liquidity largely remained 10.0

in deficit in H2 FY24. However, the liquidity 8.0
turned surplus in Apr’24. 6.0
4.0
• During Apr’24, average liquidity surplus stood at 2.0
~Rs. 24,500 cr vs. a liquidity deficit of ~Rs. -
38,600 cr in Mar’24. -2.0
-4.0

Jun-22

Nov-22

Jun-23

Nov-23
Oct-22
Sep-22

Dec-22

Dec-23
Jul-22

Jul-23

Oct-23
Apr-22

Feb-23
Apr-23

Sep-23

Feb-24
Apr-24
May-22
May-22

Aug-22

May-23

Aug-23
Jan-23
Mar-23

Jan-24
Mar-24
Source: RBI

Global Perspective – US Yield, Fed’s Stance, and Inflation

US Treasury Yield Movement:

• US 10yr yield rose sharply by 47 bps to 4.68% in Apr’24 from 4.21% in Mar’24.
• Higher than expected inflation print and resilient job market and economic growth has postponed rate
cut expectations in US. This has led to sharp rise in US yields.
• US 10yr yield remained volatile during Apr’24 and traded in the range of 4.31-4.70%.

US Fed’s FOMC Meeting:

• US Fed kept Fed Funds rate unchanged at 5.25-5.50% for 6th consecutive meeting in May’24, in line
with market expectations.
• Fed signalled that interest rates could remain higher for longer amid stalling progress in bringing
down inflation to its 2% target.
• Fed also said that it would slow the pace of its balance sheet reduction starting Jun’24.
• Market is expecting first rate cut to be delivered in Nov/Dec 2024 policy meeting.

US Inflation Overview:
• In Mar’24, US CPI inflation surpassed market expectations for a 3rd consecutive month.
• US CPI inflation stood at 3.5% YoY in Mar’24 against market expectations of 3.4% and 3.2% in
Feb’24.
• Core CPI (ex-food and fuel) was also higher at 3.8% YoY in Mar’24 vs. market expectations of 3.7%.
US 10 yr treasury yield movement in last 3 months US CPI inflation monthly trend

5.20 6.0 5.0 4.9 1.6

5.00 5.0 1.4
4.80 4.68 4.1 1.2
3.7 3.7
4.60 4.0 3.0 3.2 3.2 3.1 3.4 3.1 3.2 3.5 1.0
4.40 3.0 0.8
4.20 0.6
4.00 2.0
3.88 0.4
3.80 1.0 0.2
3.60
3.40 0.0 0.0
Jun-23

Nov-23
Dec-23
Jul-23

Oct-23
Apr-23

Sep-23

Feb-24
May-23
Mar-23

Aug-23

Mar-24
Jan-24
06-Feb-24
12-Feb-24
18-Feb-24
24-Feb-24

06-Apr-24
12-Apr-24
18-Apr-24
24-Apr-24
30-Apr-24
31-Jan-24

01-Mar-24
07-Mar-24
13-Mar-24
19-Mar-24
25-Mar-24
31-Mar-24

CPI YoY (LHS) CPI MoM (RHS)

Source: Investing.com Source: US Bureau of Labor Statistics

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 11

Fixed Income Outlook
India's Inflation Scenario India’s CPI inflation monthly trend
• India’s CPI inflation eased to 4.85% YoY in 10.0 3.5
Mar’24 vs. 5.09% in Feb’24. 9.0 7.4 3.0
8.0 6.8 2.5
• Moderation in CPI inflation was led by a fall in 7.0 5.7 5.6 5.7 5.1 5.1 2.0
6.0 4.7 4.3 4.9 5.0 4.9 4.9 1.5
core CPI (ex-food and fuel) inflation. 5.0 1.0
4.0 0.5
• Core CPI eased to 3.3% YoY in Mar’24, the 3.0 0.0
lowest print in the series. 2.0 -0.5
1.0 -1.0
0.0 -1.5
• However, food inflation continued to remain

Jun-23

Nov-23
Dec-23
Jul-23

Oct-23
Apr-23

Aug-23
Sep-23

Feb-24
Mar-23

May-23

Mar-24
Jan-24
high at 8.5% YoY in Mar’24 driven by higher
vegetables and pulses prices in the month. CPI YoY (LHS) CPI MoM (RHS)

Source: MoSPI

Outlook

Interest Rates and Liquidity:

• We expect 50 bps of cumulative rate cuts in FY25, beginning in Q3 FY25.
• We expect improvement in liquidity balances once government spending picks up pace by Q2
FY25. Foreign inflows due to inclusion in the JP Morgan bond index is also expected to provide
liquidity support.

Yield Curve Dynamics:

• In the near term, a flat yield curve is anticipated. Short-end yields remain elevated due to tight
liquidity conditions and interest rate pause from RBI. Longer end of the yield curve remains
supported by strong demand.
• Over the medium term, we might observe a steeper yield curve, influenced by rate cut from RBI and
easing of banking system liquidity.

Investment Avenues:
• Given the flatness in the yield curve, 3-5yr segment of the yield curve appears promising, offering
attractive risk-adjusted opportunities with moderate interest rate risk.
• Tactical allocation to long duration can be considered to benefit from expected interest rate cuts.

Driving Factors:
• Going forward, various factors such as global monetary policy decisions, geo-political situations,
commodity prices, bond demand-supply scenario, and domestic growth-inflation dynamics will be
pivotal in shaping the fixed income landscape.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 12

Research Spotlight

The BO account
addition is the core
building block of
the depository
business and
continued strong
additions will
growth to be
support growth
supported by
strong BO account
additions, traction
in market-linked
revenue, a stable
annuity revenue
stream, and
contribution from
CIRL. T

admin costs
spiked again
and are likely to
stay elevated on
the back of
investments in
brand visibility,
additional tech
Angel One’s moats talent, and new
are built on a near businesses
perfected digital-
native acquisition
engine, superior
unit economics and
other qualitative
factors that are
difficult
to replicate.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 13

Research Spotlight

The partnerships with

Meta (WhatsApp)
and the launch of the
MaaP platform for
higher adoption of
Google RBM (RCS
business messaging)
are promising
The growth in the
platform segment
will be powered by
Wisely platforms
and the launch of
the Next
generation DLT
platform
Trubloq.ai

PSYS ticked the

box on growth
and deal wins,
while margins
for the quarter
The margin faltered due to
improvement deal-specific
track for the dynamics
company will
continue—despite
the Q4 miss
on margin, the
medium-term
outlook on
margin stays

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 14

Research Spotlight

TELX’s growth has

normalized,
impacted by market-
share loss in the
transportation
vertical (50% of its
revenue) on account
of a higher mix of
TELX’s ER&D
Tier-1s vs.
credentials/niche
remain
Favorable, but the
hyper-accelerated
growth trajectory
(both
revenue/margin) is
very clearly behind –
valuations remain
high.

the B2C portfolio

witnessed early
signs of a revival
led by a positive
start to the
summer season
and benefits from
the real estate
uptick.
Havells remains
well placed to
capitalize from
the current uptick
seen in
private/governme
nt capex and real-
estate tailwind

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 15

The Reading Room

The Reading Room section of the Macroscope contains a collection of interesting articles we read this
month. We hope you will find the articles as interesting as we did.

1. China Is Front and Center of Gold’s Record-Breaking Rally

• Gold has surged to all-time highs above $2,400 an

ounce, driven by global market interest. China, as both
the largest producer and consumer of gold, is significantly
contributing to this rise in demand.
• Geopolitical tensions and the prospect of lower US
interest rates are further bolstering gold's appeal as an
investment. People's Bank of China has been on a buying

AI Generated
spree for 17 straight months, its longest run of purchases,
as it seeks to diversify reserves.

• Chinese demand for gold, spanning jewellery and investment, is on the rise due to limited
investment options, volatile markets, and currency concerns.

• Despite record prices and a weaker yuan, Chinese consumer demand for gold remains robust,
unlike in previous instances when Chinese consumers have snapped up gold when prices drop.
China’s gold jewellery demand increased 10% while bar and coin investments surged 28% even
as Indian demand was lower by 6%.
https://finance.yahoo.com/news/china-front-center-gold-record-010000954.html

2. PLI powers manufacturing

• Introduced by the Indian government to bolster

manufacturing across various sectors such as
pharmaceuticals, electronics, automobiles, textiles,
and white goods, among others.

• Eligible manufacturers in these sectors stand to

receive incentives based on their incremental sales
AI Generated

over a specified period under the PLI Scheme.

• Data shows that the PLI Scheme has already yielded promising results, with significant increases in
production and investment across multiple sectors. For example, in the electronics sector, the PLI
Scheme led to a 40% increase in production and attracted over $20 billion in investment
commitments within a short span.

• The article discusses how the PLI Scheme is expected to stimulate innovation, technology adoption,
and job creation in multiple industries, thereby driving economic growth.

• Challenges related to infrastructure, logistics, regulatory compliance, and global supply chain
disruptions are also addressed in the context of implementing the PLI Scheme effectively.
https://www.fortuneindia.com/long-reads/pli-powers-
manufacturing/115322#:~:text=PLI%20Scheme%20for%20pharmaceuticals%20was,government%20update%20in%20February%2Dend.

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 16

The Reading Room

3. India’s electric rickshaws are leaving EVs in the dust

• YC Electric, a significant player in India's e-rickshaw

market, sold over 40,600 e-rickshaws in 2023. In a
single month in 2023, over 44,000 e-rickshaws were
sold by around 500 manufacturers. Electric rickshaws
have a 60% market share in the segment compared to
mid-single digits for electric 2 and 4 wheelers.

• YC Electric and other manufacturers maintain a

AI Generated
minimal brand recognition, focusing on the utility and
durability of vehicles rather than aesthetics.

• Government subsidies and exemptions from obtaining permits for EVs have spurred growth. Local
manufacturing is encouraged through policies favoring domestic production.
• The company benefits from technological collaborations with Chinese partners, although geopolitical
issues have occasionally hampered these relationships.

https://restofworld.org/2024/e-rickshaw-yc-electric-india/

4. Its too late to China-Proof the lithium supply chain

• “Big Mistakes”, authored by Michael Batnick, shows even

the best investors make costly mistakes. It tells the stories
about how some of the most famous, and infamous,
investors failed miserably and the lessons we can learn
from their biggest mistakes.
• The article has excerpts from the books with investors like
Ben Graham, Jesse Livermore, John Merriwether, Jack

AI Generated
Bogle among others recounting their mistakes.

• Mistakes often teach us more about investing than successes. The mistakes need not be
your own and learning from others’ mistakes can help. The author recounts some of the
mistakes made by some of the greatest investors.

• The mistakes made by some of these famous investors included extreme faith in value
investing (Ben Graham- crash of 1929-32), obsessive trading (Jesse Livermore), extreme
leverage (LTCM- John Meriwether), trend following (Jack Bogle), extrapolating to other
assets (Steinhardt) and much more.

https://novelinvestor.com/notes/big-mistakes-the-best-investors-and-their-worst-investments-by-michael-batnick

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 17

Dots to Join

1. Riding the Russian wave: Indian crude oil import bill drops 16% in FY24

India’s crude oil imports ($bn) India’s crude oil imports (mn metric tons)

200 250
232.7 232.5
175 226.5 226.9
158
225 212.4
150 132
121 196.4
125 112 200
101
100
175
75 62
50 150
FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24

Source: Business Standard, Petroleum Planning & Analysis Cell

➢ India’s crude oil import bill fell by 16% YoY to $132 bn in FY24 from $158 bn in FY23
➢ However, import volumes remained flat at ~233 mn metric tonnes in FY24
➢ Fall in crude oil import bill in value terms was led by discounts on Russian crude
➢ Russia has remained India’s largest supplier of crude oil for last 18 consecutive months
➢ India’s crude oil import dependency hit a fresh high of 87.7% in FY24, up from 85.5% in FY22

2. Sensex earnings v/s US bonds: Narrowest gap since 2000

Sensex earnings vs. US 10 yr yield gap (figures in %)

Source: Business Standard, Bloomberg, BSE Note: Data until Apr 22, 2024

➢ Yield spread between Sensex earnings and US 10yr bond has now reached its lowest point since
2000
➢ Yield spread narrowed to -0.61% as of 22nd Apr’24 vs. a 20-year avg. spread of 2%
➢ Combination of high equity valuations in India and rise in US bond yields has led to this fall in
spread
➢ During last 1 year (since Apr’23), Sensex earnings (inverse of P/E ratio) yield has fallen by 40 bps
to 4%, while US 10yr yield has risen by 120 bps to 4.6%

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 18

Dots to Join

3. Money in motion: MF assets soar to new heights, up 34% in FY 24

MF industry average AUM (Rs lac cr) MF industry average AUM growth (% YoY)
60.0 54.1 40% 36%
55.0 34%
50.0 26%
30%
45.0 38.4 40.5
40.0 19% 20%
35.0 32.1 20%
30.0 27.0
23.1 24.5 10%
25.0 6%
10% 5%
20.0
15.0
10.0 0%
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Source: BS, AMFI. Note: Avg. AUM for Q4 of financial year

➢ Assets managed by domestic MFs rose by 34% YoY during FY24, highest growth since FY17
➢ Growth driven by sharp rally in equity market and robust inflows
➢ Average MF AUM for Q4 FY24 stood at Rs. 54.1 lakh cr vs. Rs. 40.5 lakh cr in Q4 FY23
➢ FY24 marked 12th consecutive year of AUM growth for MF industry
➢ Largest AMC – SBI with average AUM of Rs. 9.1 lakh cr in Q4 FY24

4. Fiscal fitness: GST-to-GDP ratio shows steady rise

Steady rise in GST-GDP ratio over the years

Gross GST Collection GDP at Current Prices
GST-GDP Ratio (%)
(Rs. lakh cr) (Rs. lakh cr)

FY19 11.8 189.0 6.2%

FY20 12.2 201.0 6.1%

FY21 11.4 198.5 5.7%

FY22 14.8 236.0 6.3%

FY23 18.1 269.5 6.7%

FY24 20.2 293.9 6.9%

Source: Business Standard, Finance Ministry, MoSPI Note: FY24 GDP data as per 2 nd advance estimates

➢ Gross GST collection grew by 11.6% YoY to Rs. 20.2 lakh cr in FY24
➢ GST collection in Mar’24 was 2nd highest at Rs. 1.78 lakh cr
➢ GST collection as a share of GDP has been steadily rising over the years
➢ During FY24, GST-GDP ratio stood at 6.9%, up from 6.1% in FY20
➢ GST buoyancy (change in GST w.r.t change in GDP) in FY24 stood at 1.3 vs. 1.5 in FY23 and 1.6 in
FY22

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 19

Dots to Join

5. Capital crush: Companies flock to IPOs for record raises

Amount raised through IPOs in India(Rs cr) Yearly trend of no of IPOs in India

1,40,000 80 76
1,24,603
1,20,000 54
60
1,00,000
38
80,000 40 33
61,862
54,577 51,173
60,000 14
20
40,000
21,166
20,000 -
FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24

Source: BS, Pantomath Capital Report

➢ 76 companies raised Rs. 61,862 cr through IPOs in FY24, a rise of 21% YoY
➢ Avg. 1st day gains for companies that got listed in FY24 stood at 28%
➢ 55 out of 76 companies (over 70%) listed in FY24 are still trading above their issue price
➢ At present, 56 companies have filed their offer documents with SEBI, aiming to raise Rs. 70,000 cr
➢ Market experts believe that equity raise through IPOs in FY25 could exceed Rs. 1 lakh cr

6. Capital crossroads: Banks see 50% drop in AT-1 raise in FY 24

AT-1 bonds issued by Indian banks (Rs cr)

40,000
34,894
35,000 29,984
30,000
25,000
18,723 17,516
20,000
15,000 10,815
10,000
5,000
-
FY20 FY21 FY22 FY23 FY24

Source: Business Standard, Prime database

➢ Indian banks raised Rs. 17,516 cr via Additional Tier-I (AT-1 or perpetual) bonds in FY24, down by
50% YoY
➢ SBI accounted for the largest share at Rs. 8,101 cr (~46%) in FY24
➢ As per market experts, banks’ dependence on AT-1 bonds reduced in FY24 supported by improved
profitability and lower redemptions
➢ As per Care Ratings, median Capital Adequacy Ratio (CAR) of banks stood at 15.9% as of Dec
2023, comfortably above regulatory requirement of 11.5%

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 20

Index Performance

Index Performance (30-Apr-24)

Scheme Name 1M 3M 6M 1Y 2Y 3Y 5Y 10 Y
NIFTY 50 1.2 4.0 18.5 24.9 14.9 15.6 14.0 12.9
S&P BSE SENSEX 1.1 3.8 16.6 21.7 14.2 15.1 13.8 12.7
S&P BSE 500 3.4 5.9 24.6 36.5 18.6 18.9 16.7 14.8
S&P BSE Mid-Cap 7.1 8.6 34.8 64.6 31.2 27.5 23.1 19.1
S&P BSE Small-Cap 9.6 3.5 28.2 63.0 28.5 29.7 26.4 20.2
NIFTY AUTO 5.0 16.9 41.2 69.7 42.3 32.6 21.9 14.4
NIFTY BANK 4.8 7.4 15.3 14.1 16.9 14.6 10.6 14.4
Nifty Financial Services 4.1 6.6 13.7 13.9 14.5 12.0 11.7 15.2
NIFTY FMCG 0.5 -1.5 5.8 13.3 19.1 17.3 12.3 11.9
NIFTY Infrastructure 2.9 9.1 40.7 59.5 29.2 28.3 22.5 12.6
NIFTY IT -4.9 -9.4 8.6 19.6 2.5 9.0 14.7 13.6
NIFTY MEDIA 5.4 -12.0 -13.9 10.3 -6.1 6.9 -4.7 0.8
NIFTY METAL 11.1 15.1 42.2 57.6 20.4 23.7 24.3 13.9
NIFTY NEXT 50 7.1 17.4 47.4 63.6 23.5 23.1 18.5 16.9
NIFTY PHARMA -0.1 5.8 29.2 49.9 18.7 12.1 15.1 8.9
NIFTY PRIVATE BANK 4.2 4.0 10.3 12.0 15.7 11.7 7.9 0.0
NIFTY PSU BANK 8.5 21.3 54.1 81.6 65.8 54.6 20.0 9.8
NIFTY REALTY 8.1 13.7 61.4 117.3 47.9 46.4 30.3 18.4
S&P BSE Consumer
5.6 9.6 24.6 43.4 13.7 19.5 18.2 23.8
Durables
S&P BSE OIL & GAS
4.8 11.8 58.9 58.0 21.8 24.5 13.5 11.7
Index
S&P BSE Power Index 7.7 14.3 62.9 91.8 22.9 42.7 29.6 15.6
S&P BSE Telecom 8.4 11.7 35.8 68.2 23.9 26.3 22.6 8.1

Data as on 30th Apr 2024. Returns less than 1 year are in absolute terms and greater than 1 year are CAGR
Source: ACE MF

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 21

Macro Economic Indicators

GDP Growth (% YoY): Inflation (% YoY):

10
8 5.66
12.0 6 4.85
8.4 4
8.0 2 1.41 0.53
5.5
0
-2
4.0 -4
-6

Jul-23
Jun-23
Apr-23
May-23

Nov-23
Mar-23

Aug-23
Sep-23

Dec-23

Feb-24
Mar-24
Jan-24
Oct-23
0.0
Q2 FY23

Q3 FY23

Q4 FY23

Q1 FY24

Q2 FY24

Q3 FY24
WPI CPI

Q2 Q3 Q4 Q1 Q2 Q3 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24

FY23 FY23 FY23 FY24 FY24 FY24
WPI (% YoY) 1.41 -4.18 -0.07 0.86 0.53
GDP Growth (%
5.5 4.3 6.2 8.2 8.1 8.4 CPI (% YoY) 5.66 4.87 5.02 5.69 4.85
YoY)
Source : MoSPI Source : MoSPI

Industrial Production Growth (% YoY): India Composite PMI:

12 65
61.2
10 61
8 57
6.0 5.7 58.4
6
53
4
49
2
0 45
Jul-23
Jun-23
Apr-23
May-23

Aug-23

Nov-23
Dec-23
Mar-23

Sep-23

Jan-24
Feb-24
Mar-24
Oct-23
Jul-23
Apr-23

Jun-23
May-23

Dec-23
Aug-23

Nov-23
Feb-23
Mar-23

Sep-23

Jan-24
Feb-24
Oct-23

Feb-23 May-23 Aug-23 Nov-23 Feb-24 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24

IIP (% YoY) 6.0 5.7 10.9 2.5 5.7 Composite PMI 58.4 59.4 61.0 58.5 61.2
Source : MoSPI Source :S&P Global

Domestic Yield Movement: 10 Year US Treasury Yield Movement:

8.5 5.5
7.72
7.46
7.5 7.15 5.0 4.68
7.12 4.5
6.5
6.50 6.50
4.0
5.5 3.43
3.5
4.5
Jul-23
Aug-23
Apr-23
May-23
Jun-23

Nov-23

Apr-24
Sep-23

Dec-23
Jan-24
Feb-24
Mar-24
Oct-23

3.0
Jul-23
Apr-23
May-23
Jun-23

Apr-24
Nov-23

Feb-24
Aug-23

Dec-23
Sep-23

Jan-24

Mar-24
Oct-23

Repo Rate 1 Yr CD Rates 10 Yr G-sec

Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24
Repo 6.50 6.50 6.50 6.50 6.50
1 Yr CD 7.46 7.38 7.73 7.90 7.72 US 10Yr Yield 3.43 3.97 4.93 3.92 4.68
10 Yr Gsec 7.12 7.17 7.36 7.14 7.15 Source : investing.com
Source : investing.com, RBI, Bloomberg

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 22

Macro Economic Indicators

FII Equity Flows (Rs cr): FII Debt Flows (Rs cr):
80,000 26,000
70,000 22,000
60,000 18,000
50,000
40,000 14,000
30,000 10,000
20,000 2,041
11,631 6,000
10,000
- 2,000
(10,000) -2,000
(20,000) (8,671)
-6,000 (7,682)
(30,000) -10,000
(40,000)

Jul-23
Jun-23
Apr-23
May-23

Nov-23

Apr-24
Aug-23
Sep-23

Dec-23
Jan-24
Feb-24
Mar-24
Oct-23
Jul-23
Apr-23
May-23
Jun-23

Jan-24

Apr-24
Aug-23

Nov-23
Sep-23

Dec-23

Feb-24
Mar-24
Oct-23

Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24
FII Equity FII Debt
11,631 46,618 -24,548 -25,744 -8,671 2,041 1,499 6,788 19,127 -7,682
Flows Flows
Source : NSDL Source : NSDL

USD vs. INR: Gold Price (Rs/10gm):

86 74,000
72,000 71,963
85 70,000
83.44
84 68,000
66,000
83 81.83 64,000 60,169
62,000
82 60,000
81 58,000
56,000
80 54,000
Jul-23
Apr-23
May-23
Jun-23

Aug-23

Nov-23

Feb-24

Apr-24
Sep-23

Dec-23
Jan-24

Mar-24
Oct-23

Jul-23

Nov-23
Jun-23
Apr-23
May-23

Aug-23

Dec-23

Apr-24
Sep-23

Jan-24
Feb-24
Mar-24
Oct-23

Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24

$ vs. ₹ 81.83 82.25 83.26 83.04 83.44 Gold Price 60,169 59,505 61,238 62,715 71,963
Source : Bloomberg Source :IBJA

Brent Crude (USD/Barrel):

100

90 87.86

79.54
80

70
Jun-23
Jul-23

Jan-24

Mar-24
Feb-24
Aug-23
Sep-23

Nov-23
Dec-23
Apr-23
May-23

Oct-23

Apr-24

Apr-23 Jul-23 Oct-23 Jan-24 Apr-24

Brent
79.54 85.31 87.41 81.71 87.86
Crude
Source : investing.com

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 23

IE Model Portfolio
Portfolio Details:
Stock % Stock %
HDFC Bank 11.6% United Spirits 1.0%
ICICI Bank 6.5% TV18 1.0%
Infosys 6.0% PVRInox 1.0%
Cash 5.4% HCL Technologies 1.0%
Reliance Industries 5.0% Mphasis 1.0%
Axis Bank 3.5% Tech Mahindra 1.0%
ITC 3.5% MCX 1.0%
State Bank of India 3.0% BSE 1.0%
Larsen & Toubro 3.0% Teamlease 1.0%
Maruti Suzuki India 2.5% Oil & Natural Gas Corp 1.0%
Bharti Airtel 2.5% GAIL India 1.0%
Tata Consultancy Services 2.0% Indraprastha Gas 1.0%
Tata Steel 2.0% Mahanagar Gas 1.0%
NTPC 2.0% Hindalco Industries 1.0%
PG Invit 2.0% SAIL 1.0%
Federal Bank 1.5% J K Lakshmi 1.0%
ICICI Prudential LI Co. 1.5% Stylam Industries 1.0%
Crompton Consumer 1.5% Dalmia Bharat 1.0%
Ashoka Buildcon 1.5% Aarti Industries 1.0%
Sobha 1.5% PGCIL 1.0%
Sun Pharmaceutical Industries 1.5% CESC 1.0%
Cipla 1.5% Torrent pharma 1.0%
SBI Life 1.2% Divis labs 1.0%
Mahindra & Mahindra 1.0% Dr Reddy's Laboratories 0.8%
Motherson Sumi Wiring India 1.0% Hero MotoCorp 0.5%
Canfin Homes 1.0% Bharat Petroleum Corp 0.5%

Market Cap Allocation Sectoral Allocation

BFSI 29.8%
Small Cap, 16.5% IT and Exchanges 14.0%
Energy (Oil & Gas) 9.5%
Mid Cap, 8.0% Power/Utilities 6.0%
Pharma 5.8%
Cash 5.4%
Autos 5.0%
Cash, 5.4% Consumer- Staples 4.5%
Large Cap,
70.1% Industrials 4.5%
Metals & Mining 4.0%
Consumer Discretionary 3.5%
Cement & Building Materials 3.0%
Telecom 2.5%
Real Estate 1.5%
Large Cap Cash Mid Cap Small Cap Chemicals 1.0%

Performance as of February 22, 2024

36.9% 34.9%

27.1% 27.3%
24.4% 22.7%
15.7% 19.8% 20.7%
15.6% 15.4%
12.6%
4.2%
5.4% 4.9%

1 month 3 months 6 months 1 Year Since Inception*

Model Portfolio Nifty 50 BSE 200

Details as of 22nd Feb, Returns in absolute terms except since inception. Inception date – 28-Feb-20, *Annualized

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 24

One4You
Portfolio Details:

Stock %
Tech Mahindra 8.0%
Tata Steel 8.0%
Sobha Developers 7.0%
Info Edge (India) 7.0%
MCX 6.0%
Indraprastha Gas 6.0%
GAIL (India) 8.0%
ICICI Lombard General Insurance 8.0%
ICICI Bank 8.0%
Federal bank 6.0%
Hero MotoCorp 8.0%
Crompton Greaves Consumer Electricals 6.0%
CESC 7.0%
Ashoka Buildcon 7.0%

Market Cap Allocation Sector Allocation

BFSI
Mid Cap, 28%
Oil & Gas 14%
19%
Auto 8%

Large Metals 8%
Cap, 48% IT 8%
Cap Goods & Engineering 7%
Small Power & Utilities 7%
Cap, 33% E-Commerce/App based… 7%
Real Estate 7%
Consumer 6%

Performance as on 30th April 2024

49.9%

19.8%

9.5% 9.8%
6.0%
3.6% 1.7% 3.7%

1 week 1 month 3 months since launch

One4You Nifty Multi Cap

Details as of 30th April 2024, Returns in absolute terms. Inception date – 13-Sep-23,

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 25

India Horizons - Bellwether Portfolio
Portfolio Details:

Stock % Stock %
SBI 6.0% Havells 4.0%
SBI Life Insurance 6.0% Kajaria Ceramics 4.0%
ITC 5.0% Infosys 4.0%
ICICI Bank 5.0% LTI Mindtree 4.0%
Ultratech Cement 5.0% TCS 4.0%
Kotak Bank 5.0% Dr Reddy's Laboratories 4.0%
Marico 5.0% Bharat Forge 3.0%
United Spirits 5.0% Muthoot Finance 3.0%
Reliance Industries 5.0% Nippon Life AMC 3.0%
Bank Bees 5.0% KNR Construction 3.0%
L&T 5.0% Sudarshan Chemicals 2.0%
Maruti Suzuki 4.0% Jio Financial Services 1.0%

Mcap Allocation Sectoral Allocation

BFSI 34%
Mid Cap, Consumer 15%
13% Small Cap, IT 12%
5% Cap Goods & Engineering 12%
Cement & Building Materials 9%
Oil & Gas 5%
Healthcare & Pharma 4%
Large Cap, Auto 4%
82% Metals 3%
Chemicals & Fertilizers 2%

Performance as on 30th April 2024

34.5%
29.1%
24.1%
18.1%
17.3% 16.0%17.7% 16.3% 15.6%17.3%

3.7% 2.7%

1 month 3 months 6 months 1 year 2 years Since Launch

Annualised

IHP Bellwether BSE 200

Details as of 30th April 2024, Returns in absolute terms except since inception. Inception date – 6-Apr-21, *Annualized
Returns are provisional

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 26

India Horizons - Multicap Portfolio
Portfolio Details:

Stock % Stock %
Phoenix Mills 5.0% Bank of Baroda 4.0%
Axis Bank 5.0% Birla Corporation 3.0%
Kotak Bank 5.0% Infosys 3.0%
KEI Industries 5.0% PNC Infra 3.0%
SBI 5.0% Somany Ceramics 3.0%
Navin Fluorine 5.0% Bank Bees 3.0%
Supreme Industries 4.0% Indiamart Intermesh 3.0%
Uno Minda 4.0% Crompton Consumer 3.0%
L&T 4.0% GR Infra 3.0%
Gabriel India 4.0% Saregama India 3.0%
Angel One 4.0% Voltas 3.0%
Reliance Industries 4.0% Atul 2.0%
Godrej Properties 4.0% Laurus Labs 2.0%
ICICI Pru Life 4.0%

Mcap Allocation Sector Allocation

BFSI 30%
Cap Goods & Engineering 15%
Mid Cap, Real Estate 9%
25% Auto 8%
Small Fertilizer & Chemicals 7%
Cap, 38%
Consumer 6%
Technology 6%
Cement & Building Materials 6%
Large Oil & Gas 4%
Cap, 37%
Miscellaneous 4%
Media 3%
Healthcare/Pharma 2%

Performance as on 30th April 2024

45.3%

36.9%

24.6%
24.6%
17.1%18.6% 19.0% 19.0% 18.7% 18.5%

7.3% 8.0%
3.4% 5.9%

1 month 3 months 6 months 1 year 2 year 3 year Since inception

India Horizons Multicap Portfolio BSE 500

Details as of 30th April 2024, Returns in absolute terms except since inception. Inception date – 6-Apr-21, *Annualized
Returns are provisional

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 27

Nucleus Small Cap Portfolio
Portfolio Details:

Stock % Stock %
MCX 8.1% Cholamandalam Financial Holdings 4.9%
Brigade Enterprises 7.8% Westlife Foodworld 4.3%
J B Chem & Pharma 7.7% JK Lakshmi Cement 3.1%
Blue Star 7.6% PNC Infra 2.9%
Krishna Institute of Medical
7.3% Can Fin Homes 2.9%
Sciences
Cyient 7.0% CreditAccess Grameen 2.7%
Birlasoft 6.9% Karur Vyasya Bank 2.0%
KEI Industries 6.9% Carborundum Universal 2.0%
Equitas SFB 6.7% Radico Khaitan 2.0%
ratnamani Metals 6.4% BSE Ltd. 1.0%

Mcap Allocation Sector Allocation

IT 22%

BFSI 20%
Mid Cap,
10% Cap Goods & Engineering 18%

Healthcare/Pharma 15%

Consumer 14%

Real Estate 8%
Small
Cap, 90% Cement & Building Materials 3%

Performance as on 30th April 2024 79.6%

75.9%

60.6%
56.7%

34.5%
29.3%

11.4%
6.6% 6.1%
2.5%

1 month 3 months 6 months 1 year Since Inception

Nucleus Small Cap BSE Small Cap

Details as of 30th April 2024, Returns in absolute terms. Inception date – 16-Feb-23

MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 28

Crossword
1

2 3 4 5 6

10

11

12

13

14

Across
2 The difference in yield between different types of bonds.(6,6)
8 Use of borrowed funds to increase the potential return of an investment.(8)
9 To compensate for a damage or loss actually incurred(9)
11 Giving financial assistance to a failing business or economy to save it from collapse(7)
12 Bad Loans (Acronym)(3)
13 Money kept in any bank account(7)
14 Represents an economic resource that has value.(6)

Down
1 ______ funds leverage the price differential in the cash and derivatives market to generate returns(9)
3 ___ -___ ratio measures a company's financial leverage.(4,6)
4 When an economy slows its growth rate without entering a recession.(4,7)
5 Company's net income divided by its shareholders' equity(acronym)(3)
6 Price at which a dealer will sell a security(3)
7 Costs that vary with change in production or sales(8)
10 Duty charged on imported goods(7)

Note : Solution for the above crossword will be provided in next month’s newsletter
Answers to last month’s crosswords:
CROSSWORDS
Across Down
Where words meet wit 13 Fiscal Policy 5 Bonus
9 Guarantee 15 Intrinsic Value
10 Green Bond 3 ADR
5 SWIFT 10 Delinquent
AI Generated

11 Counterfeit 11 Yield curve

6 Sharpe 5 Crash
4 ELSS 5 CIBIL
MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 29
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MARKET MACROSCOPE | INVESTMENT PRODUCTS | MAY 2024 30