Dear Policyholder,
Nifty declined 1.9% in May month amid uncertainty surrounding developments in West Asia persisted, even though the U.S. and Iran indicated that they may be nearing a deal. Mid-cap and small-cap indices outperformed the large-cap index and gained 3.2% and 0.7%. Among sectors, the Nifty PSU Bank Index (-3.8%) was the worst performer as net interest margin (NIM) compression impacted public sector banks. The Bank Nifty Index declined 1.1%, while the Metals Index was the best performer, rising 4.7%. The Nifty underperformed both the MSCI Emerging Markets Index (+9.5%) and the MSCI World Index (+4.4%). MSCI India (-0.7%) outperformed China (-2.2%) and Brazil (-9.2%). FPIs sold US$3 bn (until May 27) of Indian equities in the secondary market, whereas DIIs bought US$8.7 bn (until May 29). The INR came under pressure due to elevated crude oil prices and sustained FPI outflows.