Growth Engine Slows Down

The Indian benchmark indices have delivered negative returns for three consecutive months, affecting the mood on D-Street. The NSE benchmark Nifty plummeted 3.48 per cent in December, 2.45 per cent in January, and 2.03 per cent in February. This drop occurred despite the Union Budget being extraordinarily positive, with the fiscal deficit target lower than the revised estimate and a record capex of Rs 10 lakh crore on infrastructure to keep economic activity running. However, the market is focused on immediate gratification with sentiments surrounding uncertainty in interest rates, geopolitical risks, and growth in a slowing world, valuations, and outflows from FIIs.