In our ‘Weekend Ruminations’ of 21 June we expressed a selectively positive view on markets, based on (1) Falling crude and other commodity prices (India has saved $15bn in 1QFY16 alone on this account) (2) A pick up in Govt spending, up 24% YoY in 1QFY16 (3) Revival of monsoon momentum (4) Grexit fears moderating (5) The US Fed rate hike being ‘baked in’ as a known event. We are somewhat cautious on markets now (esp. compared to our last note) owing to the recent run up in stock prices. We see risks to global macro stability emerging from China’s slowdown. Our caution does not preclude us from being positive on select businesses from a longer term perspective.