Markets got a reprieve from the Fed as it slowed the pace of QT while leaving two cuts on the table. Powell's comments also signaled willingness to look through tariff price level impacts as transitory inflation.
In stock terms the sell-off has been concentrated in the more high beta domestic cyclical sectors, such as property, infrastructure and industrials which were the big outperformers last year. This is also why GREED & fear’s India portfolio, which is heavily positioned in these sectors, outperformed the Nifty by 18.7% in US dollar terms on a total-return basis in the year to 17 December but has since underperformed by 12.1% (see Exhibit 9).
