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Markets in midst of serious global risk aversion, says Credit Suisse

Updated : September 03, 2018 11:08:44 IST

The markets are in the midst of a very significant global risk aversion, said Neelkanth Mishra, managing director and India equity strategist, adding that their global risk appetite index was still in panic territory.

"There is a lack of certainty around all the issues-around a trade war, what will happen with US fiscal boosting up yields and forcing the Fed to raise rates and therefore creating more pressure on emerging markets which were heavily benefiting from the inflows because of the zero interest rate policy and QE policies of the Fed over the past seven-eight years,” he said.

On the GDP numbers, he said, “On overall gross domestic product (GDP), what is remarkable in the last five quarters- we have first seen disruption and then a stronger growth on that disrupted base, the two year CAGR is between 6.8 percent and 7 percent. It is almost like flat line. So trend growth is continuing."

On the rupee's constant depreciation, he added, “As the rupee weakens and as it translates into higher prices of autos, higher prices of consumer staples, you will see demand starting to slowdown. We have started to see some signs of that."
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