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market | IST

Downside risk to equities due to Omicron; India ranks high among EMs: Wells Fargo Investment

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Gary Schlossberg, Global Strategist, Wells Fargo Investment Institute, expects the dollar to rise with the Fed taking on a more hawkish tone. The US Federal Reserve on Wednesday signalled it will conclude the pandemic-era bond purchases in March and raise the interest rates thrice in 2022.

There is a downside risk to equities due to the rising Omicron cases, said Gary Schlossberg, Global Strategist, Wells Fargo Investment Institute, on Thursday. He, however, expects to see earnings and economic growth holding up well.
In an interview with CNBC-TV18, Gary said that he expects the dollar to rise with the Fed taking on a more hawkish tone. The US Federal Reserve on Wednesday signalled it will conclude the pandemic-era bond purchases in March and raise the interest rates thrice in 2022.
According to Gary, growth in the US is likely to hold up well. “For now, at least, a strong dollar is something of a deflationary element in the global economy and it could be difficult for the emerging markets as well. The benefit that they have is that global growth led by the US should continue to hold up well,” he said.
On India, he said the market should do well among emerging markets next year. "I would rank India high in the list of emerging market investments," he said while adding that the environment for EMs will become difficult as liquidity eases.
Gary expects a difficult 2022 for the Chinese market.
“We are still looking at a pretty difficult year, 2022, or at least too much of it for the Chinese market given all the uncertainties there with COVID, policy uncertainties and how that plays with economic growth. It's going to be a slow-growth year for China,” he said.
For the entire interview, watch the video