Dear Policyholder,
The Indian equity market recorded its third consecutive monthly decline; Nifty 50 Index was down 0.56% in February. Rising geopolitical tensions between Iran and the US and persistent concerns over AI-led disruption overshadowed improving corporate earnings and easing trade tensions after India sealed a key trade deal with the European Union and reached an interim trade framework with the US. The midcap index was up 1.2% while the small cap index was up 0.75%. PSU banks (+8.9%) was the best performer followed by the Auto sector (+5.3%) on resilient demand. IT was the worst performer owing to anticipation of AI led disruptions (-19.5%). Nifty underperformed the Morgan Stanley Capital International (MSCI) Emerging Markets Index (+5.4%) and the MSCI World Index (+0.6%). India underperformed most other EMs during the month except for China (-3.2%). During the month of February, Foreign Portfolio Investors (FPIs) bought US$2.2bn in Indian equities in the secondary market, whereas Domestic Institutional Investors (DIIs) bought USD4.2bn. The INR appreciated during the month boosted by the announcement of the US-India trade deal.