'Polarised' and 'sell on rally' may define markets' character, say experts

With GDP growth seen shrinking, funds likely to chase stocks with high growth forecast

The RBI’s acknowledgement of an expected shrinkage of economic growth in FY21 is bound to have a strong impact on Street sentiment.

RBI Governor Shaktikanta Das did not quantify the expected fall, which also suggests it would be anything but a V-shaped recovery.

This, along with higher inflation expectations and uncertainty over the cure for the coronavirus, is likely to keep stock markets more volatile. Money will chase stocks with high growth visibility, say experts, who point to the weakness in key indicators.

While March’s index of industrial production (IIP) contracted by 16.7 per cent, India’s manufacturing PMI (Purchasing Managers’ Index) hit an