Five factors that may have a bearing on markets in FY19

For now, liquidity still appears fine and there is no undue cause for concern and visible trends are being seen as a shift from equity linked assets to other asset classes

The Indian equity markets have continued to limp downwards in the aftermath of the PNB scam, and the trends witnessed in the recently concluded by-poll elections are making the markets jittery and sentiments sour. The global markets have somehow shrugged off fears emanating from rising bond yields (which still remain pretty elevated), a rising interest rate cycle (with the FED expected to raise rates by 25bps later this week), cyclical inflationary pressures playing detrimentally on discretionary spending patterns and the narrowing of spreads between the 10yr government paper and riskier asset classes like equities. For now, liquidity still appears fine