1. Emerging markets bonds, equities rally set to slow down: Kotak

Emerging markets bonds, equities rally set to slow down: Kotak

The Indian market’s fundamentals may perhaps become more relevant — they are good but not as great as what stock prices make them out to be.

By: | Published: September 1, 2016 6:09 AM

The macro rally in EM bonds and equities post the ‘Brexit’ referendum may slow down as global markets assess the extent of potential policy normalisation by the US Fed over the next few months and limited accommodation potential from other central banks and impact of the same.

The Indian market’s fundamentals may perhaps become more relevant — they are good but not as great as what stock prices make them out to be.

Global markets have marginally recalibrated their expectations of a US Fed rate increase based on recent comments of various US Fed governors before and during the Jackson Hole Symposium and recent economic data from the US.

The rally in EM bonds and equities may slow down (if not reverse) over the next few months as markets assess the extent of monetary policy normalisation in the US and impact of continued monetary accommodation by other large central banks.

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