Indian equities turn volatile in September on back of negative global cues – Indian equities turned volatile after rallying for three months in a row with the benchmark Nifty down by 1.2% for the month as FII flows turned negative. FII outflows for the month stood at `7,783 crore after record inflows of `47,078 crore in August 2020. Markets were also impacted by negative global cues in the second half of the month due to a surge in infections in Europe and failure on the part of the US congress to make any significant progress on the second US stimulus package.

Key risks which can derail the recovery rally are 1) Surge in infections as the economy is opened up further 2) Delay in vaccine production as compared to timelines expected by markets 3) Failure of the US Government in passing the second stimulus bill leading to volatility in global markets.

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