Inappropriate to say that markets have bottomed; invest in a staggered way

At current levels, it is time to be overweight on equities.

India continues to witness a perfect storm. A once in century medical crisis has disrupted economic activities, which in turn, is reflected in financial market stress. Sectors catering to necessity are doing better than those catering to luxury. On the other hand, hospitality, entertainment and aviation have been hit badly. Major sectors such as auto, real estate, BFSI are also feeling the stress. Sectors like FMCG, Telecom, agri industries are less affected.

Financial year 2020-21 (FY21) will witness negative gross domestic product (GDP) growth for the first time after 1980. In April, steel production was down 87 per cent year-on-year (YoY) and power generation was down 22 per cent YoY. Overall business outlook, as measured by the PMI Index, was down to lifetime low. The risk of the second wave continues to exist as we do a calibrated opening of the economy.

Other countries are also in the same boat. As per IMF, the US is likely to see -5.9 per cent while the EU is likely to see 7.5 per cent contraction in GDP despite high fiscal and monetary stimulus.

However, there is a silver lining. Fertiliser sales nearly doubled in May over last year. It’s a sign of a boom in the agri sector. Britannia posted over 20 per cent revenue growth in April and May. Power demand has begun to inch up again – a sign of economic activity recovering from bottom. ‘Fastag’ & E-way bill generation of May also show some recovery from bottom.

There is also demand for good quality Indian papers, as reflected in successful offerings by Reliance Industries (RIL), Hindustan Unilever (HUL) / HDFC Life / Bharti Airtel and Kotak Mahindra Bank. MSCI & FTSE has proposed to increase India's weight in emerging market (EM) indices over next quarter. This can bring anywhere between $3-7 billion foreign portfolio investor (FPI) flows in Indian equities.

MFs urge investors to de-link YES Bank account and scout for alternatives

Move aimed to avoid funds getting blocked in account post-redemption request.

Mutual funds, distribution platforms and individual advisors have asked investors to immediately look at alternative bank accounts for their investment mandate with a moratorium coming into force on YES Bank.

Nilesh Shah, managing director of Kotak MF, said in a social media post that if clients wanted to change their redemption bank account mandate from YES Bank to any other bank they could send a request. "We shall process the request for tomorrow's redemption so that their money isn't blocked."

Zerodha -- which runs the distribution platform Coin -- has also urged investors to look at other accounts.

"We have cancelled all fund withdrawal requests made by clients to their YES bank accounts so that the money doesn’t get blocked. Please change, if your primary bank account is YES, to any other and withdraw the funds," Nithin Kamath, founder and chief executive officer of Zerodha said in a post.

"We have called up our clients and told them to immediately change the bank account mandates," said Bharat Bagla, an individual MF distributor.

Further some platforms are also taking steps to restrict fresh flows to the schemes of YES MF, given the uncertainty around the fate of the asset management company after the bank is amalgamated into another bank or entity, which is likely to have its own MF subsidiary.

"We have discontinued all fresh investments in YES AMC with immediate effect. Existing investors in YES AMC schemes can continue to send requests for redemptions," Paytm Money said.

On Thursday night, YES Bank was placed under moratorium by RBI with the withdrawal limit capped at Rs 50,000 for account holders.