In March 2020, global and Indian markets faced significant declines due to the COVID-19 pandemic, with Indian equity indices like S&P BSE Sensex and Nifty 50 dropping by over 23%. Central banks worldwide, including the US Federal Reserve and the Reserve Bank of India, implemented substantial stimulus measures and interest rate cuts to mitigate economic fallout. While defensive sectors performed relatively well, market volatility continued, prompting recommendations for selective equity investments and asset allocation strategies.

1. April 2020
Global Markets Mar-20
(%)
Current
PE
10 Yr
Average
US (13.7) 15.5 15.7
UK (13.8) 15.8 17.4
Japan (10.5) 16.0 19.8
Hong Kong (9.7) 9.4 10.9
Singapore (17.6) 9.5 12.2
China (6.9) 7.4 8.5
Domestic Markets Mar - 20
(%)
Current
PE
10 Yr
Average
S&P BSE Sensex (23.1) 17.81 20.0
NSE Nifty (23.2) 19.38 20.3
S&P BSE Auto (31.0) 16.6 18.4
S&P BSE Bankex (34.0) 16.8 17.3
S&P BSE Capital Goods (28.7) 15.7 28.6
S&P BSE Consumer
Durables (26.0) 33.7 30.6
S&P BSE FMCG (6.5) 27.1 39.2
S&P BSE Healthcare (9.9) 25.7 28.3
S&P BSE IT (14.3) 15.0 19.7
S&P BSE Metals (30.7) 5.3 12.3
S&P BSE Mid Cap (27.6) 20.5 23.8
S&P BSE Oil & Gas (20.6) 7.3 12.1
S&P BSE PSU (24.2) 7.2 13.3
S&P BSE Realty (36.3) 17.1 24.0
US Economy: The US’ Federal Reserve System slashed its benchmark interest
rate to 0-0.25% and launched a $700 billion stimulus programme in a bid to
protect the economy from the effect of Covid-19. The central bank also
announced new lending programmes worth $300 billion to support the financial
markets.
Eurozone: The European Central Bank (ECB) launched a new Pandemic
Emergency Purchase Programme to counter the risk caused to the euro area by
the Covid-19 outbreak. The bank will buy up to €750 billion ($820 billion) in
government and private sector bonds and left the rate on the main refinancing
operations at a record low of 0%.
UK: The Bank of England (BoE) reduced interest rates by 65 basis taking the
rates to their lowest ever at 0.1%. The central bank also added 200 billion
pounds ($239 billion) to its quantitative-easing target, raising it to 645 billion
pounds to lessen the economic fallout of the Covid-19 pandemic.
Japan: The BoJ pledged to buy 200 billion yen ($1.90 billion) of 5-10-year
Japanese government bonds and also injected an additional 1.5 trillion yen in
two-week loans. Japan also announced a second package of measures worth
about $4 billion in spending to cope with the fallout of the Covid-19 outbreak.
China: The People's Bank of China (PBoC) launched a 50 billion yuan reverse
repurchase operation and lowered the seven-day reverse repurchase rate from
2.40% to 2.20%. Effective from March 16, 2020, the central bank cuts reserve
requirement ratio (RRR) by 50-100 bps for qualifying banks. The new RRR cuts
will release a combined 550 billion yuan ($79 billion) of long-term funds.
Index Performance: Indian equity indices S&P BSE Sensex and Nifty 50
tanked 23% each in March 2020 due to worries about rapid spread of Covid-
19 in the country and the government’s lockdown decision. The benchmark
indices also logged their biggest one-day fall on March 23 and hit their lower
circuits twice in the month, triggering trading halts for 45 minutes.
Inflation: Retail inflation, based on Consumer Price Index (CPI), fell to 6.58%
in February 2020 from a 68-month high of 7.59% in January, because of a
decline in food prices and the base effect.
Domestic Developments:
Headwinds:
The domestic indices fell sharply owing to concerns that the 21-day
nationwide shutdown announced by the Indian government to prevent the
spread of the epidemic in the country will have serious economic fallout.
Several agencies, including CRISIL, Moody's Investors Service and Fitch, have
slashed India’s the growth forecast after the announcement of the lockdown.
The lockdown announcement came even as crisis at a large domestic private
sector bank had already dented the market sentiment. Selling by foreign
institutional investors (FIIs) also contributed to the market decline.
Tailwinds:
Steeper losses were, however, prevented after the government unveiled a Rs
1.70 trillion package and the Reserve Bank of India (RBI) cut its repo rate by
75 basis points to 4.4%. The central bank also announced several other
measures to ease the impact of lockdown on the financial markets. Bargain
hunting after the decline and buying by the domestic institutional investors
(DIIs) also aided the market.
EQUITY UPDATE
Data Source: Crisil Research; * Data till Mar 31, 2020;
Data Source: Crisil Research; * Data till Mar 31, 2020, PE- Price to Earnings
Indian Market Update
Global Market Update

2. Indian Market Update
Earnings Growth (%) FY19 FY20E FY21E
Sensex 18.8 14.5 21.5
Macro Indicators Latest
Update
Previous
Update
GDP (YoY%) 4.7%
(3QFY20)
4.5%
(2QFY20)
IIP (YoY%) 2% (Jan) -0.3% (Dec)
Crude ($ bbl) 22.74 (Mar 31) 50.52 (Feb 28)
Core Sector Growth
(YoY%)
5.0
(Feb 2020)
2.2
(Jan 2020)
Trade Deficit ($ mn) -9,850
(Feb 2020)
-15,170
(Jan 2020)
Current Account Deficit
($ bn)
-1.4
(3QFY20)
-6.3
(2QFY20)
FII Holding in Indian
Equities (%)#
22.2
(3QFY20)
22.0
(2QFY20)
Flows Mar - 20 Feb - 20 Jan - 20
FIIs (Net Purchases /
Sales) (Rs cr)
-61,973 1,820 12,123
MFs (Net Purchases /
Sales) (Rs cr)
25,743 9,863 1,384
Note: # FII hldg includes ADR/GDR (BSE500 Index); Data Source: Crisil Research; * Data till Mar 31, 2020; CAD: Current Account Deficit; GDP: Gross Domestic Product, IIP: India Industrial
Production FII: Foreign Institutional Investors; MF-Mutual Fund; E- Estimate
Outlook & Triggers
Global Markets ended on a sombre note in March as the world grappled with the widening spread of COVID-19. Indian Markets (Nifty 50
Index) witnessed a sharp decline of 23.2% - a large monthly decline since the Global Financial Crisis. In a bid to contain the spread of
COVID-19, many countries announced lockdowns bringing economies to a grinding halt and raising concerns of severe slowdown. This
led to further negative sentiments and risk aversion across asset classes.
India too saw a steep rise in the number of COVID-19 cases. As a measure to further prevent the spread of COVID-19, the Government of
India too ordered a complete nationwide lockdown for 21 days starting March 25 leading to a sharp sell-off in Indian markets. The
decision of a complete lockdown spooked FIIs and resulted in an outflow of ~61,972 Crs.
Defensive sectors like Consumer Staples and Healthcare did well while high beta sectors like Financials and Industrials underperformed.
(Source: NSE)*
In what can be called as an integrated effort to support growth, Global Central Banks announced a series of fiscal and monetary stimulus
measures. The US Federal Reserve cut interest rates twice and announced US$2tn stimulus package, the BoE too cut rates and
announced a new round of QE worth GBP 200bn. On the domestic front, the RBI too came up with measures ranging from policy rate
cut, CRR cut to regulatory forbearance to mitigate the impact of lockdown on economy. The MPC cut policy rates by 75 bps to 4.4%.
The RBI also cut CRR ratio from 4% to 3% for a year. The Finance Minister too announced several measures like cash transfers, free food
grain, gas cylinders and interest free loans.
The Indian economy continues to see some green shoots despite global tensions and we believe India is better placed in terms of
fundamentals than previous crisis. Headline CPI eased to 6.6% in February Vs. 7.6% in January. Composite PMI in February rose to 57.6.
January IIP came in at +2% up from -1.8% in December-19. India’s monthly trade deficit too decreased to $9.9bn in February from
$15.2bn in January.
Global Developments:
Intermittent gains in the global equities after the US government announced a
$2.2 trillion stimulus package to soften the economic blow of Covid-19
outbreak also supported the local indices. Measures announced by the
international agencies and global central banks, including the US Federal
Reserve, also helped the markets pare the losses.
Sectoral Impact:
All the S&P BSE sectoral indices nosedived in March 2020. Realty, banking
and finance counters witnessed heavy selling pressure. The S&P BSE Realty
Index, S&P BSE Bankex and S&P BSE Finance Index plunged 36%, 34% and
33%, respectively. The S&P BSE Auto Index and S&P BSE Metal index
declined 31%, each. Defensive counters such as fast moving consumer goods
(FMCG), healthcare and information technology (IT) fell the least. The S&P
BSE FMCG index, S&P BSE Healthcare index and S&P BSE IT index declined
6%, 10% and 14%, respectively.

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 – Equity Schemes
Pure Equity
Schemes
ICICI Prudential Bluechip Fund
ICICI Prudential Multicap Fund
These Schemes aim to generate capital appreciation through
participation in equities.
Long-Term SIP
Schemes
ICICI Prudential Value Discovery Fund
ICICI Prudential Smallcap Fund
ICICI Prudential Midcap Fund
ICICI Prudential Large & Mid Cap Fund
ICICI Prudential India Opportunities Fund
These schemes aim to generate long term wealth creation over a full
market cycle.
Asset Allocation
Schemes
ICICI Prudential Balanced Advantage Fund
ICICI Prudential Equity & Debt Fund
ICICI Prudential Multi-Asset Fund
ICICI Prudential Equity Savings Fund
ICICI Prudential Regular Savings Fund
ICICI Prudential Asset Allocator Fund (FOF)
These schemes aim to benefit from volatility and can be suitable for
investors aiming to participate in equities with low volatility.
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.
50
70
90
110
130
150
170
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Invest in Equities
Aggressively invest in Equities
Neutral
Incremental Money to Debt
Book Partial Profits
78.9
Our ‘VCTS’ framework suggests that post the recent intense sell-off, Valuations - have become very attractive, Cycle - we are at the
bottom of the business cycle and Sentiments – around equity as an asset class is extremely negative due to muted past returns and
massive FII outflows. Trigger – Covid-19 spread curve flattening and domestic economic growth trajectory. We believe the market has
stepped in an oversold zone and is providing a good margin of safety. Hence, we recommend investing in equities aggressively at this
juncture.
We believe that the divergence between Value and Growth stocks continues to prevail with select Megacaps still in the bubble zone.
Currently, fundamentally sound value stocks are available at inexpensive valuations, providing good dividend yield and have better
earnings visibility. Hence, we recommend investors to take exposure to schemes with Value bias – ICICI Prudential Value Discovery
Fund and Special Situation theme – ICICI Prudential India Opportunities Fund.
We also believe that volatility is inherent to equities which need to be kept in mind while investing. As an investor, one must embrace
volatility and be cognizant of their own asset allocation while investing. We continue to recommend Dynamic Asset Allocation schemes
which aim to benefit from volatility by reducing the overall cyclicality of the portfolio. Small, midcaps and value oriented stocks over the
next few years is recommended for lumpsum investment for patient long term investors.
Equity Valuation Index

4. ICICI Prudential Bluechip Fund is suitable for investors who are seeking*(An open ended equity scheme predominantly
investing in large cap stocks):
 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**(An open ended equity scheme investing
in both large cap and mid cap stocks):
 Long term wealth creation
 An open ended equity scheme investing in both large cap 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*( An open ended equity scheme following a
value investment strategy):
 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*(An open ended hybrid scheme investing
predominantly in equity and equity related instruments):
 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*(An open ended dynamic asset
allocation fund):
 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*(An open ended equity scheme investing across
large cap, mid cap, small cap stocks):
 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*(An open ended scheme investing in equity,
arbitrage and debt):
 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*(An open ended scheme investing in Equity,
Debt and Exchange Traded Commodity Derivatives/ Units of Gold ETFs/units of REITs & InvITs/Preference Shares):
• 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*(An open ended hybrid scheme investing
predominantly in debt instruments):
 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.
Riskometers

5. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
In preparation of the material contained in this document, ICICI Prudential Asset Management Company Limited (the AMC) has used information that is publicly
available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the
AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document
is believed to be from reliable sources. The AMC, however, does not warrant the accuracy, reasonableness and / or completeness of any information. We have
included statements / opinions / recommendations 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, 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 monetary and interest policies of
India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. The AMC (including its
affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not be 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 this material. All figures and other data given in this document are
dated and the same may or may not be relevant in future. The information contained herein should not be construed as a forecast or promise nor should it be
considered as an investment advice. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other
financial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. The sector(s)/stock(s) mentioned in this communication do not
constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s). Past
performance may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information
document of the scheme. Please refer to the SID for more details.
The information contained herein is only for the purpose of information and not for distribution and do not constitute an offer to buy or sell or solicitation of any
offer to buy or sell any securities or financial instruments in the United States of America ("US") and/or Canada or for the benefit of US persons (being persons
falling within the definition of the term "US Person" under the US Securities Act, 1933, as amended) or persons residing in Canada.
ICICI Prudential Midcap Fund is suitable for investors who are seeking*(An open ended equity scheme predominantly
investing in mid cap stocks):
 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*(An open ended equity scheme predominantly
investing in small cap stocks):
 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*(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.:
 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.
ICICI Prudential India Opportunities Fund is suitable for investors who are seeking*(An open ended equity scheme following
special situations theme):
 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.
Disclaimer