Anurag Singh, Managing Partner at Ansid Capital, provides insights on the investment strategy during the Iran-Israel conflict. Learn about the implications on markets and the recommended approach for investors.
Anurag Singh says: “On the face of it, it looks like there is no apparent risk, at least not to the US economy and the Federal Reserve has a buffer, they are already at 5.5%. In case some trouble hits, they can always use that Fed put and come down and cut rates. But India is a different story.”
“Predictions on when the US Fed will cut rates vary from March to April or September next year. I believe the threshold of cutting the rates a little later, probably next September. But they can always come back and rescue the economy by cutting rates this time which was not there for the last couple of years.”
“I expect 11-12% returns from Nifty at an index level. That is where my decadal return story comes in. I have divided the Indian market returns into 4 decades and at the end of 2001, we saw there is a 11% return and this is S&P 500 but if you see BSE Sensex also, 2001 to 2011 was 20% then it was 12% and current is of course under way.”
The extended move on the dollar index over the past six days suggests bad news for equities, particularly emerging markets. The bond market is showing signs of worry due to the US government s high spending and the potential for a shutdown. Higher bond yields are ultimately negative for equity markets, leading to more money flowing into dollar bonds and pushing up the value of the dollar. This correction is considered healthy, but emerging markets like India may be at a disadvantage due to rising yields.