Equity Market Update for the month of September

The market update provides a gist on how the equity markets reacted in September to global and domestic news flow and the market outlook ahead.

Key Highlights for September :

· Sept continued to be a challenging month for global equity markets. July-Sept period has seen the sharpest correction in global markets after the Lehman crisis.

· Indian Equity Markets which was the worst performing market YTD till August has outperformed all global equity markets in Sept with the lowest correction. This trend should continue considering India has strong domestic consumption…

· Hang Seng, MSCI China and Russia equity markets corrected by 14-21% this month.

· Fed announced stimulus package "Operation Twist & US president Obama proposed a $447bn jobs package to help boost the US economy

· European crisis continued inspite of several meetings between EU political leaders. Lack of political will affected EU region.

· Commodities also had a bad month in Sept with all commodities correcting sharply. Silver and copper down by 28 and 24% respectively.

· Crude prices correct globally by 10%, but petrol prices increased in India by Rs 3.14 due to weakening rupee.

· Chinese markets saw huge correction in Sept and Chinese markets trading below 2008 valuations of 9X earnings.

· As expected RBI increased Repo rates by 25 bps due to persistent high inflation

· Debt Market yields spike up on higher government borrowing programme and will remain elevated for sometime.

· Indian Rupee fell to a 28 month low to the Dollar an on verge of breaking 50 Rs to the Dollar.