As global headwinds rise, can India continue outperformance? Rohit Agarwal answers

economictimes.indiatimes.com:

Rohit Agarwal, Senior Fund Manager, Kotak Life Insurance, says “even though India might outperform in the global terms, India will not be immune to global challenges. India will not be immune to the yield rates. For example, if the US 10-year is yielding 5% today, why should a US investor put his money outside his country at all? You are getting risk-free 5% in that country and that is a call that many asset allocators might take and that might impact some flows here and there. But on a standalone basis, India will still stand out in the world as a better place to be in.”

What is happening to the global arena right now? Do you think this is just the start of a downturn or this is something that the Indian market will take in its stride and the outperformance will continue?
As you said, these are volatile times and though we have not seen some of these yields in the last two decades or so, that does not mean that we do not know how to handle it. It means is there are macro issues on the corner, at the horizon, obviously especially on the global side.

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If you look at the US 30-year mortgage rate today, it is higher than the Indian mortgage rate. That tells us a story which we need to be cognisant of. The risk to the markets globally and India per se is any kind of a blow off that can happen because given that yields have moved to closer to 5%, there are certainly losses sitting on the books of somebody or the other. Now the day that comes out, it can lead to some kind of panic.
When I say panic, it is not that the risk