Christopher Wood, Head of Global Equity Strategy in Jefferies, said that the recent increase in equity was more a rally on the bear market in the US, caused by Indian shares. In an interview with Sanam Mirchandani, Wood said India was not among the top investment goals at this time. Edit quotes:
What is your evaluation of general meetings in the Indian market?
My view is that it is a bear market ralion in the US. The reason to be skeptical about rally in America is because you have a double whammy – a higher level tightening and shrinking the balance – negative for liquidity. Rally is pushed in the hope that inflationary pressure has peaked. Inflation may peak but the main problem is whether inflation has been resolved. The real problem is whether Fed will ..
Does Fed tend to continue to increase interest rates aggressively?
The Fed spoke hawkish but in the end, I was skeptical they would hold on to the 2%target. My guess is that inflation runs around 4% or 5% in America at the end of this year. The problem of inflation in America or Europe is far greater than in India.
What was the worst of the sale of foreign investors in Indian equity?
They haven’t bought that much compared to what they sell. One of the reasons why foreigners sell so much in India earlier this year is because they put more money into China. China eases the policy and India is increasingly tightening, so China looks more attractive. But in recent months, the story of China’s economic investment has been significantly damaged by a sustainable covid emphasis policy. So it has a cause ..
Where is the price of oil to?
At the end of the year, I saw higher oil prices. The main reason why oil prices are not higher is due to weak demand from China, which is related to the covid emphasis policy. Covid’s oppression policy is negative for China, but this is positive for the Indian economy and the Indian market. I remain structurally bullish on oil due to lack of supply. Another good news for India is cheaper Russian oil. The Covid S …
Where is India standing in your investment destination list?
This year India is not the best market, because of the monetary tightening cycle. The best performing market, when I was last examined, in Asia was Indonesia. I am overweight my biggest in Asia this calendar year so far is Indonesia. India is fine, but India has a lot of cross flow. At a view of 10 years, India is my favorite bet but not in 2022. RBI is tightening. That’s behind the curve, but not like B …
For India, what is important is what RBI does. An interesting point about India this year is the stock market resilience given a large number of foreign sales. In the long run, a person must continue to invest in India but surely the risk of correction increases. What RBI does is important.
What is your view for Rupee?
The Indian currency will be vulnerable as long as there is tightening. So, the good news is that RBI is very behind the curve earlier this year. I became less nervous in the Indian currency in the last few months because RBI had begun to raise interest rates. I was more nervous in January and February before we made an intermittent increase. Indian inflation problems are worse than in China or Indonesia, ..