Rate sensitives driving the market today because there is potentially an easier outlook on rates: Ashish Gupta
Ashish Gupta, CIO, Axis Mutual Fund, says “following inclusion of Indian bonds into the JP Morgan EM index next year, while money will flow directly into the fixed income markets, it will also drive the overall liquidity in the ecosystem. There can be flow of money into the equity market. The rate sensitives are driving the market today because there is potentially an easier outlook on rates with improved liquidity. Traditional beneficiaries like banks, NBFCs and real estate would be the first port of call. Industrial stocks will also benefit.”
It was more a bolt out of the blue when the US Fed upgraded their economic guidance for next year. What would be the implications of that because at the beginning of the year, the narrative was that the US will slow down or hit a patch of soft landing and China will come back and surprise everybody. Well, the surprise has come, but it is the opposite of what we anticipated.
No, I think you are absolutely right. The global macro has surprised this year. But the positive surprise has primarily been only from the US and if we look at global growth in aggregate, while the US has surprised positively, Europe has surprised negatively and China, as you mentioned, has been a negative surprise.
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But even more concerning is the fact that some of the challenges with China appear to be a bit deeper and structural rather than just cyclical and that means that this headwind for global growth because China for the last 15 odd years has been one of
