The Tantallon India Fund closed up 3.38% last month with June quarter earnings releases and management commentaries surprising positively in the face of stark economic contraction and spiking Covid-19 infections.

The path to “normalisation” is in the resilience of the Indian rural and semi-urban economies, sector consolidation, and tailwinds from accommodative global monetary and fiscal policies, targeted domestic stimulus, low energy prices, and a weaker US dollar.

The US Federal Reserve has moved the goalposts, guiding for “lower for much longer” and a “new” inflation-targeting framework to ensure sustained labour market gains. The negative real yield narrative for the US dollar, and committed, accommodative global central bankers will drive the rerating of non-US-dollar risk assets, and perhaps, the market’s focus moving beyond Big Tech and e-commerce to the more traditional reflation beneficiaries. 

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