Standard Chartered Bank expects the Indian equity market to continue doing well in the near term though there are credit concerns, Steve Brice, chief investment strategist, told CNBC-TV18.
“Obviously, we have had credit concerns and that’s always at the back of investors’ minds until we get vaccination rates above 70 percent but the view is that the economy reopening will continue. We can see some volatility in the interim, but we are going to be higher than what we are today in 12 months time,” said Brice.
On US inflation, he said, “Our view is that the Fed will look through this temporary spike in inflation; we are looking for a much lower inflation, just above 2 percent in 2022.”
“We are still a long way from the Fed hitting the brakes; they may lift their foot off the accelerator in Q1 by introducing some tapering if everything goes according to plan, but they are certainly not going to be hiking rates for the foreseeable future,” Brice added.
It is likely that growth is peaking and likely to slow going, according to Brice. However, a healthy pace of recovery is also expected.
"It’s not something that equity market investors should worry about nor should the temporary spike in inflation. Therefore, the central scenario is that bond yields gradually tick higher and equities continue to rise along with that side. So a sign of confidence that recovery is continuing," he explained.
For the entire interview, watch the video