The global and Indian markets are in the grip of multiple and contradictory forces. The S&P and Nasdaq rallied strongly in 2023 on hopes of an end to the Fed rate cycle. But January’s searing jobs data hinted at the likelihood of even more rate hikes; in India, an excellent budget with great investment promises, a limited deficit is countered by the volatility of Adani Group shares and China is emerging as a rival destination.
Speaking in an interview at CNBC-TV18NC Badriniwas, MD and regional head of markets and treasury-Asia-Pacific at Citi Bank, said that despite the challenges posed by COVID-19, India will continue to perform well and receive a fair share of flows.
He said: “After all of the deep COVID, there is reasonable momentum in the economy, and therefore one would expect reasonably strong data out of China in the coming quarters, but from the perspective of l ‘India, that doesn’t necessarily change the outlook.”
However, Badriniwas also said there could be a rebalancing between China and India as India currently has high valuations. On the other hand, he pointed out that a reasonable momentum is returning to China after the pandemic, largely thanks to the country’s recent efforts to open up its economy.
On monetary policy, he expects the Reserve Bank of India (RBI) to hike rates tomorrow February 8, but does not anticipate any significant change in the central bank’s stance. This comes as the RBI continues to navigate the delicate balance between supporting economic growth and maintaining financial stability.
The Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das started its three-day meeting on Monday, February 7, amid expectations of a smaller rate hike of 25 basis points. basis for signaling a pause in the rate hike frenzy that began in May last year. to control inflation.
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(Edited by : John Pradeep)