The domestic economy is still strong, with buoyant readings in credit, sales volumes, materials usage and output. Our rough growth index has slowed to around 5% y/y but remains impressive, and all else equal this would normally be a signal for an equity market rebound.

However, external factors are a problem. Exports are going nowhere, net FDI inflows have all but disappeared, gold purchases are still a source of pressure, broad import demand is rising as well ... and now we have a sustained oil price shock. All of this is killing the rupee and dampening equity performance, and we'll stay on the sidelines until the situation improves.