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'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

Markets continue to rally on RBI policy fillip; Sensex rises 164 points

The negative sentiment towards key sectors such as banks and hospitality has also piled up since last week's stimulus package, which failed to address the concerns and meet market’s expectation of direct support from government.

Shreepad S Aute Mumbai
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

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First Published: May 22 2020 | 7:45 PM IST

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