Indian market outperforms in June driven by FPI flows – Post the under performance in the month of May Indian equities rallied sharply in June on the back of positive FPI inflows of `21,832 cr. Nifty was up by 7.4% for the month as compared to the DJIA which was down by 2.1% for the month. As expected the rally was also more broad based and cyclical sectors like Auto, banking, consumer goods also participating in the rally.
Stock selection will be the key to generate alpha going forward – While proactive action by Governments and central banks globally has prevented the situation from deteriorating significantly, it is unlikely that the recovery will be a V shaped one and it may take some time for the global economy to recover to its pre Covid levels. Therefore while we remain positive on the markets from a longer term perspective we feel that investors should be judicious in their stock selection from here on and should focus on companies with high quality business franchises which have strong revenue visibility going forward.

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