Volatility notwithstanding, the broad rally in risk assets globally is a standout feature for 1Q2024, climbing a wall of worry that extended through the tragedies in Crimea and Gaza, shock election outcomes (most recently in Turkey), recession headlines in Germany, Japan and the UK, rising energy prices, the weaponisation of trade flows and access to critical technologies, continued Chinese economic malaise and the ominous posturing ahead of the US Presidential elections in November.
The Tantallon India Fund closed flat in March, up just 0.02% from February, a month roiled by significant volatility with the sell-off of small- and mid-cap stocks spilling over into the broad market and local investors continuing to rotate into more “defensive” consumer discretionary, pharmaceutical, energy and public sector company stocks.
However, the markets seemed to have stabilised at the end of the month on the back of bargain hunting by local institutional investors positioning for a Modi victory, policy continuity and accelerating reforms after the conclusion of the General Elections on June 4. The sustained bid for domestic equities seems intact.
