India interest rates will peak by March, three months ahead of previous estimate, says Macquarie
U.S. inflation data released on Thursday evening showed better-than-expected cooling, which gave markets the impression that there may be room for maneuver offered by the U.S. Federal Reserve and other banks. global powerhouses like the Reserve. Bank of India while deciding their next rate action steps.
Interest rate actions across the world typically take their cues from US Fed policy and as a result, according to Sandeep Bhatia, head of Equity-India at Macquarie Group, interest rates in India are expected to now peak earlier than expected.
“Interest rates are now expected to peak by March; they were expected to peak after June next year but now it is believed to be in March and once we see a spike in interest rates that will be a better time to watch new age stocks,” he said.
The Indian stock market has seen something of a resurgence and there’s no reason it shouldn’t continue, according to Bhatia. As for the sector outlook, he thinks IT stocks will continue their run.
“Its value there is definitely better than expected results on the US macro economy, which helps,” he said.
“The rest of the world will continue to be in a zone of conflict, flux and uncertainty, which is not going away and which helps India,” he continued.
Macquire is struggling to make longer-term appeal to public sector enterprise (PSU) banks. However, he prefers SBI and Bank of Baroda in the banking space.
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(Edited by : Abhishek Jha)