Indian Equity Markets (Nifty 50 Index) inched higher (+1.5%) during the month outperforming its emerging market peers. New set of positive reforms by the government on domestic front and expectations of resolution of US-China trade war on the global front were the major contributing factors which lifted sentiments. Read the full document to know more.

1. December 2019
Global Markets Nov -19
(%)
Current
PE
10 Yr
Average
US 3.7 19.3 15.7
UK 1.4 17.8 17.5
Japan 1.6 18.7 19.9
Hong Kong (2.1) 11.2 11.3
Singapore (1.1) 12.1 12.3
China (2.2) 8.7 8.7
Domestic Markets Nov -19
(%)
Current
PE
10 Yr
Average
S&P BSE Sensex 1.7 29.1 20.1
NSE Nifty 1.5 26.3 20.3
S&P BSE Auto (4.5) NA 18.8
S&P BSE Bankex 6.7 34.3 16.6
S&P BSE Capital Goods (7.6) 21.2 28.8
S&P BSE Consumer
Durables (7.5) 45.4 29.9
S&P BSE FMCG (4.3) 33.0 39.2
S&P BSE Healthcare 2.8 26.3 28.5
S&P BSE IT (3.4) 18.6 19.8
S&P BSE Metals 5.1 8.1 12.5
S&P BSE Mid Cap 1.5 31.1 22.9
S&P BSE Oil & Gas (3.7) 12.2 12.3
S&P BSE PSU (1.6) 13.1 13.6
S&P BSE Realty 5.0 26.4 24.1
US Economy: The US Federal Reserve (Fed) October policy
showed that it would follow a wait and watch approach. OCED
expects the US economy to grow at 2.3% in 2019 and 2% in
2020, and said further interest rate cuts would be warranted only
if growth turned weaker.
Eurozone: The European Commission slashed its growth
forecast for the Eurozone to 1.1% this year from 1.2% it
expected in July, and to 1.2% each in 2020 and 2021 from 1.4%
owing to global trade and geopolitical tensions, and the Brexit.
UK: The Bank of England’s Monetary Policy Committee voted to
maintain the bank rate at 0.75%. The UK’s economic growth was
upgraded by OCED to 1.2% this year from 1.0% previously
estimated and 1% in 2020.
Japan: The Bank of Japan (BoJ) Governor Haruhiko Kuroda said
that the central bank has room to deepen negative interest rates.
OECD expects Japan’s economy to grow 1% and 0.6%, in 2019
and 2020, respectively.
Emerging Markets: The People's Bank of China (PBOC) cuts its
one-year loan prime rate and the five-year loan prime rate in
order to revive the economy impacted by slowing demand and
US trade tariffs. The central bank governor Yi Gang said that
PBOC will step up credit support to the economy
Index Performance: Indian equity indices rallied for the third
consecutive month in November owing to positive domestic
and global indicators. Benchmarks S&P BSE Sensex and Nifty
50 gained 1.7% and 1.5%, respectively.
Inflation: Retail inflation based on the consumer price index
(CPI) surged past the Reserve Bank of India (RBI)’s medium-term
inflation target of 4.0% in October 2019, for the first time since
August 2018.
Domestic Developments:
Tailwinds:
 Hope of an interest rate cut by the RBI in its December 2019
policy meeting
 government approved setting up a Rs 250 billion bailout
fund to finance 1,600 stalled housing projects
 Persistent inflows from the foreign institutional investors
(FIIs) also supported the benchmarks. better-than-expected
domestic corporate earnings reports, value buying in index
heavyweights
Headwinds:
 Weak domestic macroeconomic cues including contraction
in the industrial output in September and Consumer Price
Index (CPI)-based inflation breaching the RBI’s medium-term
inflation target of 4% in October.
EQUITY UPDATE
Data Source: Crisil Research; * Data till Nov 30, 2019;
Data Source: Crisil Research; * Data till Nov 30, 2019, PE- Price to
Earnings
Indian Market Update
Global Market Update

2. Indian Market Update
Earnings Growth
(%)
FY19 FY20E FY21E
Sensex 7.6 21.1 28.8
Macro Indicators Latest
Update
Previous
Update
GDP (YoY%) 4.5%
(2QFY20)
5%
(1QFY20)
IIP (YoY%) -4.3% (Sep) -1.1% (Aug)
Crude ($ bbl) 62.43 (Oct 31) 60.23 (Oct 31)
Core Sector Growth
(YoY%)
-5.8
(Oct 2019)
-5.2
(Sep 2019)
Trade Deficit ($ mn) -11,010
(Oct 2019)
-10,860
(Sep 2019)
Current Account
Deficit ($ bn)
-14.3
(1QFY20)
-4.6
(4QFY19)
FII Holding in Indian
Equities (%)#
22.0
(2QFY20)
22.5
(1QFY20)
Flows Nov -19 Oct-19 Sep-19
FIIs (Net Purchases
/ Sales) (Rs cr)
25,231 12,368 7,548
MFs (Net Purchases
/ Sales) (Rs cr)
-5,600 5,181 11,029
Note: # FII hldg includes ADR/GDR (BSE500 Index); Data Source: Crisil Research; * Data till Nov 30, 2019; CAD: Current Account Deficit; GDP: Gross
Domestic Product, IIP: India Industrial Production FII: Foreign Institutional Investors; MF-Mutual Fund; E- Estimate
Outlook & Triggers
Indian Equity Markets (Nifty 50 Index) inched higher (+1.5%) during the month outperforming its emerging market peers.
New set of positive reforms by the government on domestic front and expectations of resolution of US-China trade war on
the global front were the major contributing factors which lifted sentiments. Sectors like telecom and bank did well.
Telecom rallied due to Government’s decision to provide telco players with a 2-year moratorium on spectrum related dues.
Capital Goods and Consumer Durables underperformed during the month. (Source: NSE)
Global Equities were a mixed bag with the US outperforming on hopes of likely closure of phase one US-China Trade deal
and an upward revision in its Q3 GDP figure to 2.1%. The EU witnessed a rebound in inflation and fall in unemployment
rate thereby lifting sentiments. Hong Kong ended in negative due to its on-going clash with China.
Indian market sentiments were lifted with the announcement of a major strategic disinvestment move. The government has
also announced a partial/full sale of its holdings public sector entities. In addition to the above reform, the delivery of a
positive verdict by the Supreme Court clarifying several aspects of insolvency resolution interpreted variously earlier lifted
market mood. These reforms in addition to recent ones (corporate tax cuts) have helped build investor confidence.
The GDP data released for Q2 FY 20 came at 4.5% down from 5.0% in Q1 FY20. IIP numbers too indicated a contractionary
trend. (Source: Crisil Research)
However, given the government attempts to lift sentiments, some green shoots can be seen like Current Account Deficit
turning positive, export growth and foreign flows improving. However, we believe there is enough room for further uptick
over medium to long term since structural reforms need time to play out.
Global Developments:
Headwinds:
 Flaring US-China trade tensions amid reports that the phase
one of the trade deal between the two nations will not
happen this year also dented sentiments.
 Weak economic indicators from China and political turmoil in
Hong Kong and spike in the crude oil prices weighed on
local indices.
Sectoral Impact:
Sectoral indices ended mixed in November. S&P BSE BANKEX
index was the top sectoral gainer – rising nearly 7% amid hopes
that the RBI will cut interest rates for the sixth straight time in
December meet and also on the Supreme Court’s judgement on
Essar Steel resolution in favour of financial creditors. Buying
interest was also seen in metal and realty shares, with S&P BSE
Metal and S&P BSE Realty jumping about 5% each. S&P BSE
Healthcare gained around 3% due to rally in a pharma major.
On the flip side, consumer durables, capital goods and auto
shares saw sell-off. S&P BSE Consumer durables index, S&P
BSE Capital goods index and S&P BSE Auto index plunged
7.6%, 7.5% and 4.50%, respectively.
Data Source: CRISIL

3. Equity valuation index is calculated by assigning equal weights to Price to Earnings (PE), Price to book (PB), G-Sec*PE and
Market Cap to Gross Domestic Product (GDP)
Our Recommendation
Our recommendations for various investor types are as follows:-
 Long Term Horizon – SIPs/STPs in Mid and Small Cap schemes
 Underweight On Equity – Large and Multi Cap schemes
 Moderately invested in equities – Asset Allocation schemes
 For existing investors, continue with their SIPs in pure equity schemes.
Our Recommendations – Equity Schemes
Pure
Equity
Schemes
ICICI Prudential Bluechip Fund (An open ended equity scheme predominantly
investing in large cap stocks)
ICICI Prudential Multicap Fund (An open ended equity scheme investing across
large cap, mid cap and small cap stocks)
These Schemes aim to
generate capital
appreciation through
participation in equities.
50
70
90
110
130
150
170
Nov-06
Nov-07
Nov-08
Nov-09
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Invest in Equities
Aggressively invest in Equities
Neutral
Incremental Money to Debt
Book Partial Profits
Currently, markets are overvalued owing to select few growth stocks. There is a significant divergence between Value and
Growth stocks. Value and special situation themes are expected to play out well over the next few years. We have started
preferring smallcaps and multicaps over largecaps and would recommend investing in smallcaps & midcaps in a staggered
manner and lumpsum investment in this category only with a longer indicative investment horizon. We also recommend
adding equities to your portfolio in a staggered manner through SIP. For investors who would prefer to benefit from
volatility, we recommend Dynamic Asset Allocation schemes which endeavor to manage equity levels basis market
valuations.
Equity Valuation Index
Outlook & Triggers
111.10

4. Long-Term
SIP
Schemes
ICICI Prudential Value Discovery Fund (An open ended equity scheme following
a value investment strategy
ICICI Prudential Smallcap Fund (An open ended equity scheme predominantly
investing in small cap stocks)
ICICI Prudential Midcap Fund (An open ended equity scheme predominantly
investing in mid cap stocks)
ICICI Prudential Large & Mid Cap Fund (An open ended equity scheme investing
in both large cap and mid cap stocks)
These schemes aim to
generate long term
wealth creation over a
full market cycle.
Asset
Allocation
Schemes
ICICI Prudential Balanced Advantage Fund (An open ended dynamic asset
allocation fund)
ICICI Prudential Equity & Debt Fund (An open ended hybrid scheme investing
predominantly in equity and equity related instruments)
ICICI Prudential Multi-Asset Fund (An open ended scheme investing in Equity,
Debt, Gold/Gold ETF/units of REITs & InvITs and other asset classes as may be
permitted from time to time)
ICICI Prudential Equity Savings Fund (An open ended scheme investing in
equity, arbitrage and debt)
ICICI Prudential Regular Savings Fund (An open ended hybrid scheme investing
predominantly in debt instruments)
ICICI Prudential Asset Allocator Fund (FOF) (An open ended fund of funds
scheme investing in equity oriented schemes, debt oriented schemes and gold
ETFs/schemes)*Investors may please note that they will be bearing the recurring expenses of this Scheme in
addition to the expenses of the underlying Schemes in which this Scheme makes investment.
These schemes aim to
benefit from volatility
and can be suitable for
investors aiming to
participate in equities
with low volatility.
Thematic
/Sectoral
themes
ICICI Prudential India Opportunities Fund (An open ended equity scheme
following special situation theme) risk investmen
Investors could invest
in this thematic scheme
for tactical allocation.
None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested to consult their
financial advisors.
ICICI Prudential Bluechip Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme predominantly investing in large cap stocks.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Large & Mid Cap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme investing in both largecap and mid cap stocks
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Value Discovery Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme following a value investment strategy.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Equity & Debt Fund is suitable for investors who are seeking*:
 Long term wealth creation solution
 A balanced fund aiming for long term capital appreciation and current income by investing in
equity as well as fixed income securities.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Balanced Advantage Fund is suitable for investors who are seeking*:
 Long term wealth creation solution
 An equity fund that aims for growth by investing in equity and derivatives.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
Riskometers

5. ICICI Prudential Multicap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme investing across largecap, mid cap and small cap stocks.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Equity Savings Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An Open ended scheme that seeks to generate regular income through investments in fixed
income securities, arbitrage and other derivative strategies and aim for long term capital
appreciation by investing in equity and equity related instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Multi-Asset Fund is suitable for investors who are seeking*:
• Long term wealth creation
• An open ended scheme investing across asset classes.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Regular Savings Fund is suitable for investors who are seeking*:
 Medium to Long term regular income solution
 A hybrid fund that aims to generate regular income through investments primarily in debt
and money market instruments and long term capital appreciation by investing a portion in
equity.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Midcap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open-ended equity scheme that aims for capital appreciation by investing in diversified
mid cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Smallcap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme that seeks to generate capital appreciation by predominantly
investing in equity and equity related securities of small cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Asset Allocator Fund (FOF) is suitable for investors who are seeking*:
 Long Term Wealth Creation
 An open ended fund of funds scheme investing in equity oriented schemes, debt oriented
schemes and gold ETFs/ schemes.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.

6. ICICI Prudential India Opportunities Fund is suitable for investors who are seeking*:
 Long Term Wealth Creation
 An equity scheme that invests in stocks based on special situations theme.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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