Mayur Patel flags global factors as key drivers behind market correction 

​”So, the key factors are hardening of US Treasury yields and also stronger dollar. So, always whenever we see a sharp jump in dollar, FIIs tend to pull out money from emerging markets,” says Mayur Patel, Fund Manager, Listed Equity At 360 One Asset.Give us a sense of what you are making of the union budget. Really interested to get your take over here. Consumption has been a very heavy focus on the budget this time. It has been a largely consumption driven budget. Give us a sense of which sectors in particular do you see benefiting from this and to what extent?Mayur Patel:So, it was evident in the budget that government’s focus has shifted towards reviving consumption. So, the one lakh crore tax stimulus is clearly going to boost urban discretionary spending. And if you see, we have around seven-and-a-half crore income tax filers and based on some workings and certain assumptions, it seems that one to two crore taxpayers would get around 4% to 6% boost on the wallet, which is actually good to drive some uptick in discretionary spending across segments like consumer durables, auto, QSR, travel, etc. So, it is going to definitely stimulate sentiments.And as we have always seen that the first leg of a cycle is always triggered by uptick in sentiments and with a lag the tangible factors contribute. Also, going forward next year, we have a pay commission which is going to come up with hikes and that is also going to add on to the consumer demand. So, consumer discretionary as a sector has been going through a really weak patch over the last few years and it is set for a recovery this year.But given the announcements in the union budget, yes, indeed, the focus was on fiscal policy. But today, the monetary policy focus has been taken away. The RBI decision is through. Help us understand that what were your key takeaways in a sense that why the markets do not look that excited because all in all most of the announcements were made as per the market expectation. But today, why the market is reacting this way, if you can give us some sense there. But in the long run, how can we see the benefits coming in from this policy decision?Mayur Patel: The RBI announcements in this policy were clearly in line with expectations. 25 bps rate cut and maintaining the neutral stance. Not jumping the gun in terms of going really dovish when you have such a huge uncertainty around global factors. So, there is no reason for market to read anything really negative out of this policy announcements. But from September onwards if you see the market has been in a correction mode driven by, I would say, more of a global factors. And if you see last one month, we have seen around $8 to $9 billion of FII outflows driven by broad-based selling across emerging markets. So, the key factors are hardening of US Treasury yields and also stronger dollar. So, always whenever we see a sharp jump in dollar, FIIs tend to pull out money from emerging markets.So, I would say it is more of a glo