The Tantallon India Fund closed 0.71% lower in September amid significant global market volatility triggered by a spike in US bond yields with the Fed’s messaging on tapering, a spike in energy prices and the Evergrande liquidity crisis.

These issues exacerbated worries over supply chain disruptions, higher input commodity prices, and the likelihood of a structural slowdown in China given its ageing population, the regulatory crackdown on private enterprise, and the implications of global supply chains relocating away from the country.

In India, we are most concerned about energy prices remaining at elevated levels, the attendant drag on the current and fiscal accounts, and, crucially, the constraints imposed on the Reserve Bank of India by stubbornly high inflationary expectations. High oil prices also hurt.

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