Key Highlights
Aligning with policy pause: inflation print supports RBI’s stance at 6.5%. It has raised the threshold for future rate hikes in FY24.
Core inflation dips: Mar’23 brings relief after pandemic persistence
Key takeaways
Takeaways
- Both inflation and core inflation have fallen, attributed in part to the high base effect from last year.
- RBI (Reserve Bank of India) may likely continue with its policy pause after the recent decline in inflation.
- The potential risks to the current outlook include:
- Geopolitical tensions
- Global financial market volatility
- Rise in oil prices
Views
- Fixed Income
- Three to Five Years looking attractive from a duration standpoint. Conservative allocation towards longer end.
- Stick to Sov/AAA-rated papers. Minimal and cautious allocation to AA-rated instruments
- Accrual (Active + Passive) + Duration (Active) as strategy
- Equity
- Large-cap portfolio orientation; build midcap exposure selectively. Smallcap exposure if required by target portfolio.
- Sectoral Winners: Auto & Ancillaries, Banks, Capital Goods, Industrials, IT, FMCG
Continue allocation to gold in line with target asset allocation.
Fixed Income Play
