Momentum continued in July with retail investors on a rampage buying spree. Most of the large companies reported results this month. On an average revenue and profits declined by 40-70%. While some companies managed to add one-time gains and adjust provisions to make the numbers look optically better others were forced to report losses. India was not alone, most other global markets also followed a similar pattern.

With Nifty earnings falling exponentially and index levels rising, the PE moved to all time high levels by end of the month to 30x. Considering the future outlook and further decline in earnings the current levels appear unsustainable. We stay on the sidelines and await a suitable opportunity to increase our exposure into equities.