In the backdrop of the evolving domestic market conditions, the Reserve Bank of India (RBI) convened a surprise, unscheduled Monetary Policy Committee (MPC) meeting, the outcome of which was announced today.
Indian sovereign bond (old* 10-year benchmark G-Sec) closed at 6.17%, in anticipation of more monetary steps by the Reserve Bank of India, as the lockdown imposed to curb the COVID-19 pandemic has taken a huge toll on an already faltering economy.
Indian equity markets underperformed peer group MSCI EM and MSCI APXJ, despite Finance Minister announcing a special economic package of Rs. 21 trillion (10.1% of GDP) including liquidity injected by the RBI and credit guarantees. However, the details of the stimulus package announced by the Finance Minister fell short of market expectations. The overall fiscal impact is expected to be modest in the range of 1-1.2% of GDP.
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