The equity markets are going through a phase of higher volatility, mainly reflecting to a large extent, the developments abroad, especially in the US. The normalization of liquidity is going to bring with it the normalization of returns, as the markets go through some correction in response to liquidity normalization, higher inflation, and rising interest rates. While the valuations on the basis of ten- year average trailing PE looks reasonable and fair, one cannot say that on a relative basis the domestic market is attractive for overseas investors. There are continuing exits from the domestic markets by foreign investors while the domestic flows from systematic investment plans has been the net plus for the local asset management companies. What is more important at this point is the issue of sustaina- bility of the earnings in the coming quarters. Some challenges may come up in terms of the high-cost environment which businesses are facing mainly due to the high commodity prices, the non-availabili- ty of raw materials even at high prices, the likelihood of wage-price spiral, and the limited capacity to pass on the cost through price. Much would depend on the intensity and the quality of economic growth that is likely to be realized. What could further affect the altitude of the markets is the price of crude in overseas markets, which is a major import bill for the economy, and which might get ballooned on account of the weakening Rupee. This may act as a dampener on growth, and also on the sustainability of the market valuations. Beyond this quarter, Q3 22, the markets would also look forward to the Union Budget, which is often considered a harbinger of a fresh uptick in the markets. But what is more important at this point of time is the ability of the government to tide over the fiscal constraints and bring back the fiscal glide path, to go back to the pre-pandemic fiscal maths at an early date. This may be watched very closely by investors especially overseas investors, as the way the fisc is run has consequences for interest rates and exchange rates and the markets. The course of dis-investments is also something that will be viewed with interest. From a sectoral perspective technology, pharma and healthcare and private banks will hold good value for the portfolio from a long – term perspective. Though the pandemic helped some of these sectors, in the post-pandemic period too they will create enduring value for portfolios by virtue of the fact that their contribution to human life and welfare, and automation and digitization will create value over time. The economic recovery in the US as also Europe, and the pick-up in growth in India and China too augur well for the key sectors. We had also highlighted the importance of hybrid funds, balanced advantage funds, and value funds, in the last few monthly publications. We continue to suggest the same, and also stress the importance of well manged funds with a track record for investment portfolios. Investments in a phased manner will be preferred.