Interim Budget 2019, presented on Feb 1, held a few good surprises for the farmer community and the salaried classes but was largely in line with market expectations. Markets, which had already ended January 2019 on a flat note (up 0.5% for the month), remained largely unaffected by the Budget announcements. Read the document to know more.

1. Equity Update
February 2019
Market Overview (as on January 31, 2019)
Macro Indicators
Latest
Update
Previous
Update
GDP (YoY%)
7.1
(2QFY19)
8.2
(1QFY19)
IIP (YoY%)
0.5
(Nov)
8.2
(Oct)
Crude ($ bbl)
61.89
(Jan 31)
53.8
(Dec 31)
Core Sector Growth
(YoY%)
2.6
(Dec 2018)
3.5
(Nov 2018)
Trade Deficit ($ mn)
-13,077
(Dec 2018)
-16,671
(Nov 2018)
Current Account Deficit
($ bn)
(19.1)
(2QFY19)
(15.9)
(1QFY19)
FII Holding in Indian
Equities (%)#
21.7
(1QFY19)
21.5
(4QFY18)
Note: # FII hldg includes ADR/GDR (BSE500 Index);
Data Source: Crisil Research; * Data till Jan 31, 2019; CAD: Current
Account Deficit; GDP: Gross Domestic Product, IIP: FII: Foreign
Institutional Investors; MF-Mutual Fund
Global Market Update
US Economy: The US Federal Reserve (Fed) did not change the
interest rates in its January policy meeting and reversed its
stance of “future gradual increases”, saying it would be “patient”
before making further moves.
European Union: The European Central Bank (ECB) retained its
policy stance while keeping a rate hike later this year on the
table.
UK: The UK’s economic growth cooled to 0.3% in the three
months to November, down from 0.4% in the three months to
October, according to the Office for National Statistics. This was
its weakest pace of expansion in six months.
Japan: The Bank of Japan (BoJ) maintained its key short-term
interest rate target at -0.1% and pledged to guide 10-year
government bond yields around 0%. It also cut inflation forecast
for the fiscal year starting in April to 0.9% from 1.4%.
Emerging Markets: China's GDP rose 6.4% on-year in the fourth
quarter, down slightly from 6.5% growth in the third quarter.
GDP grew 6.6% in 2018, meeting Beijing's growth target but
marking the lowest growth for the country since 1990. The
People's Bank of China cut the banks’ reserve ratio by 1% for the
fifth time in a year.
Source: CRISIL Research
Indian Market Update
Index Performance: Indian equity indices began 2019 on a mixed
note. Benchmarks S&P BSE Sensex rose 0.52% while Nifty 50
fell 0.29% in January 2019.
Domestic Developments: Encouraging domestic
macroeconomic cues including easing of inflation, which raised
hopes of an interest rate cut by the Reserve Bank of India (RBI) in
its sixth bi-monthly monetary policy meeting on February 7,
2019, helped markets. Better-than-expected corporate earnings
from some index heavyweights also augured well for the local
indices. Stock-specific selling amid release of the December
2018 quarter earnings numbers and concerns about rising debt
and corporate governance issues kept investors jittery. Investors
also remained cautious ahead of the interim budget on February
1, 2019.
Global Developments: In the beginning of the month, the market
largely fell owing to weak global cues including revenue warning
from tech-giant Apple, and disappointing Chinese and US
manufacturing activity data which fueled fears of slowing global
growth. Concerns about global economic slowdown intensified
further after the IMF cut its global growth forecast to 3.5% and
3.6% for 2019 and 2020, respectively. Rebound in global equities
after the US Fed kept interest rates unchanged and said it would
be patient in hiking rates further this year boosted the
sentiments. Hopes of a resolution of the US-China trade conflict
after the start of second round of trade talks between two
nations, reopening of the US government and few positive US
economic data also aided the indices.
Flows Jan -19 Dec -18 Nov-18
FIIs (Net Purchases /
Sales) (Rs cr)
-4,262 3,143 6,223
MFs (Net Purchases /
Sales) (Rs cr)
6,995 2,736 4,896
Domestic Markets Jan -19
(%)
Current
PE
10 Yr
Average
S&P BSE Sensex 0.5 24.8 19.7
NSE Nifty (0.3) 23.0 19.9
S&P BSE Auto (11.2) 22.3 19.0
S&P BSE Bankex 1.2 53 15.8
S&P BSE Capital
Goods (0.8) 23 29.7
S&P BSE Consumer
Durables 2.7 39.3 27.2
S&P BSE FMCG (1.8) 46.3 37.2
S&P BSE Healthcare (0.3) 30.8 29.2
S&P BSE IT 8.3 21 19.8
S&P BSE Metals (7.4) 6.8 13.1
S&P BSE Mid Cap (5.7) 32.3 21.6
S&P BSE Oil & Gas (1.0) 10 12.8
S&P BSE PSU (4.6) 55.3 13.6
S&P BSE Realty (1.3) 9.6 23.5
Global Markets
Jan -19
(%)
Current
PE
10 Yr.
Avg.
US 7.2 16.2 15.5
UK 3.6 15.6 18.9
Japan 3.8 14.4 20.2
Hong Kong 8.1 10.6 11.1
Singapore 4.0 11.5 12.2
China 9.0 8.6 8.7
Earnings Growth (%) FY18 FY19E FY20E
Sensex 5 12 27

2. Equity Update
February 2019
Sectoral Impact: S&P BSE Sectoral indices ended mixed in
January 2019. S&P BSE Information Technology (IT) index was
the top gainer – up nearly 8.34% due to weakness in the rupee
against the dollar. Buying interest in defensive counters such as
consumer durables brought in more gains. S&P BSE Consumer
Durables index rose 2.71%. Among the laggards, S&P BSE Auto
index was the top loser – plunging 11.23% due to sell-off in the
auto stocks on weak December 2018 sales numbers and weaker-
than-expected earnings from the index major. Capital goods and
power stocks saw heavy selling pressure; S&P BSE Capital
Goods index and S&P BSE Power index fell nearly 8% and 6%,
respectively. Metal stocks fell following decline in the global
base metal prices and fears of slowdown in China; S&P BSE
Metal index lost 7.44%.
Source: NSE, BSE; Crisil Research
Market Outlook and Triggers
Interim Budget 2019, presented on Feb 1, held a few good surprises for the farmer community and the salaried classes but was
largely in line with market expectations. Markets, which had already ended January 2019 on a flat note (up 0.5% for the month),
remained largely unaffected by the Budget announcements.
The month of January was good for the IT, energy, consumer durables and banking sector which ended the month in the green while
the rest of the sectors were in the red with auto being the worst, down 11.2%, followed by the consumer durables sector (8%), and
metals sector (7.4%). While oil prices were on their way up, markets drew comfort from the US Federal Reserve’s decision to hit the
pause button on further rate hikes for now. Domestically, January saw markets largely preparing for the February Interim Budget and
the 2019 general elections, about five months away.
This additional recurring expenditure could put pressure on the government’s fiscal situation going forward.
On the fiscal front, the govt revised its FY19 fiscal deficit expectations to 3.4% from 3.3% earlier while continuing to maintain the
current account deficit (CAD) at 2.5%. The government also indicated at simplification of the direct tax system which could boost tax
collections going forward.
Measures such as full tax rebate on income upto Rs 5 lakh, increase in standard deduction, and TDS limits for the middle-class could
help boost consumption in the economy and benefit companies in the auto and consumption sector.
We maintain our neutral stance on equity markets and watch out for the 2019 general elections (April/May) as the key trigger for the
rest of the year. Policy decisions by the RBI, apart from global factors such as end of the bond-buying programme by central banks
globally, escalation of trade-wars, pace of foreign inflows, among others, would be other significant triggers for the market.
We believe we have entered the accumulation phase of investing as most of our market triggers are in the moderate zone, prompting
us to move to a neutral zone from cautious. Equity accumulation, particularly mid-and smallcaps, should be in a staggered manner
through SIP/STP. For lumpsum, we recommend asset allocation and/or largecap-oriented schemes. Themes such as banking and
infrastructure could be explored in 2019, post the recent oil price correction. With valuations fully priced in, special situation themes
could also play out during 2019.
Equity Valuation Index
Equity valuations show that the market valuations are in the zone where investors are recommended to invest in asset allocation
schemes.
Equity valuation index is calculated by assigning equal weights to Price to equity (PE), Price to book (PB), G-Sec*PE and Market Cap to Gross
Domestic Product (GDP)

3. Equity Update
February 2019
Our Recommendations
Investors may continue with their investments in pure equity schemes. As uncertainty regarding global events and run-up to
the elections cannot be ruled out, we believe market could be volatile in the near-term. Hence, for new investors we
recommend investing in asset allocation schemes. Investors looking for long-term exposure could consider investing
systematically in small and midcap schemes. Investors looking for tactical allocation could invest in thematic schemes
encompassing banking and infrastructure sectors.
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.
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 such 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)
These schemes aim to benefit
from volatility and can be
suitable for investors aiming
to participate in equities with
low volatility.
Thematic/Sectoral
schemes
ICICI Prudential Banking & Financial Services Fund
(An open ended equity scheme investing in banking & financial services
sector)
ICICI Prudential Infrastructure Fund
(An open ended equity scheme following infrastructure theme)
ICICI Prudential India Opportunities Fund
(An open ended equity scheme following special situation theme)
Investors could invest in this
thematic scheme for tactical
allocation. It would be a high
risk investment option.
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 before investing.

4. Equity Update
February 2019
Disclaimer & Riskometers
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.
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.

5. Equity Update
February 2019
ICICI Prudential Multi-Asset Fund is suitable for investors who are seeking*:
• Long term wealth creation
• An open ended scheme investing in at least three asset classes with minimum
allocation of 10% to each asset class.
*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 Banking & Financial Services Fund is suitable for investors who are
seeking*:
 Long Term Wealth Creation
 An open-ended equity scheme that predominantly invests in equity and equity
related securities of companies engaged in banking and financial services.
*Investors should consult their financial advisers if in doubt about whether the product
is suitable for them.
ICICI Prudential Infrastructure Fund is suitable for investors who are seeking*:
 Long Term Wealth Creation
 An open-ended equity scheme that aims for growth by primarily investing in
companies belonging to infrastructure and allied sectors
*Investors should consult their financial advisers if in doubt about whether the product
is suitable for them.
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.
In the preparation of the material contained in this document, the AMC has used information that is publicly available, including information
developed in-house. Information gathered and material used in this document is believed to be from reliable sources. The Fund however does
not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no
such party will assume any liability for the same. All recipients of this material should before dealing and or transacting in any of the products
referred to in this material make their own investigation, seek appropriate professional advice and carefully read the scheme information
document. We have included statements in this document, which contain words, or phrases such as "will", "expect", "should", "believe" and
similar expressions or variations of such expressions that are "forward looking statements". Actual results may differ materially from those
suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to,

6. Equity Update
February 2019
exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our
services and / or investments, the monitory and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic and
foreign laws, regulations and taxes and changes in competition in the industry. All data/information used in the preparation of this material is
dated and may or may not be relevant any time after the issuance of this material. The AMC takes no responsibility of updating any
data/information in this material from time to time. he AMC (including its affiliates), the Fund and any of its officers directors, personnel and
employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary,
consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully
responsible/are liable for any decision taken on the basis of this material.