While sounding bullish on emerging markets, especially India, Adrian Mowat, chief emerging market and Asian equity strategist at JP Morgan Chase & Co in an interview to CNBC TV18 said that Nifty could touch 10,000 by December end. He further added that he expects a strong performance by the emerging markets over next few months and expects a healthy return.
On a year-to-date basis, the BSE Sensex has risen 8.45 per cent to 26,160.90 till September 14. NSE Nifty 50 index rallied 9.59 per cent to 8726.60 during the same period.
On the upcoming Reserve Bank of India (RBI) monetary policy reviews due in October and December, Mowat expects a 25 basis points rate cut in December.
“We will see more money flow into China as against India over 6 months,” Mowat said during an interview. Since the beginning of the ongoing calendar year, foreign institutional investors (FIIs) have poured Rs 43,099.32 crore in the domestic equity markets with gross purchases of Rs 7,71,572.54 crore and gross sales of Rs 7,28,473.22 crore.
As uncertainty over US Federal Reserve going for a rate hike this year looms, Mowat said it is a negative sign if the American central bank doesn’t raise rates. However, he added that Fed raising rates would not be completely negative for emerging markets like India.
India’s higher growth rate is a big advantage for the country. He said, “India remains a popular overweight amongst emerging markets.”
Mowat has said that deficit in monsoon will be a negative . The prediction of “above normal” rainfall by India Meteorological Department (IMD) may fall flat as with only 15 days left for monsoon to end officially, deficiency has reached 5 per cent. Although 86 per cent of the country has received “normal” and “above normal” rainfall, the figure may go down when withdrawal of the southwest monsoon will begin this week.