*Current Equity Market Correction: Key Reasons* 1. *Tight Liquidity*: Liquidity conditions are significantly negative, around ₹2.5–3 lakh crore. 2. *Rupee Depreciation*: The rupee continues to weaken and is expected to stabilize around 92, according to experts. 3. *US Interest Rates*: Elevated US interest rates and an inverted yield curve are adding pressure. 4. *Weak Corporate Earnings*: Disappointing earnings in Q2FY25 have impacted market sentiment. 5. *Government Capex Allocation*: A significant portion of capex is directed toward non-multiplier segments, reducing its overall productivity. RBI’ yesterday addressed Liquidity and Currency Concerns 1. *Open Market Operations (OMO)*: ₹60,000 crore G-Sec purchase to inject liquidity. 2. *56-Day VRR Auction*: ₹56,000 crore through a Variable Rate Repo to address short-term liquidity needs. 3. *USD/INR Swap*: A $5 billion buy/sell swap for six months to stabilize the rupee and manage forex reserves. These measures are equivalent to a “rate cut” in terms of their impact and signal the RBI’s proactive stance. Other Factors 1. *US Interest Rate Outlook*: Rate cuts are expected by Q3 CY2025 as prolonged high rates could strain the US economy. 2. *Corporate Earnings*: Earnings recovery is anticipated from Q2 FY26 as macro conditions improve. 3. *Capex Allocation:* The upcoming budget may emphasize productive, growth-oriented investments. *Investment Strategy Amidst correction and Volatility* *#the next six months could remain volatile due to these factors. This presents an opportunity to:#* *# Invest systematically in equity-oriented products that have the potential to generate alpha.#*