Global markets have largely rejoiced at the US Federal Reserve signal of the first rate cut in September.
However, the start of the rate cut cycle cannot be the only reason for the rally, if history is anything to go by. The performance of the Indian and the US markets during the previous rate cut cycle was muted.
The benchmark Nifty gained 4.5 per cent and 1.1 per cent in three months and 1 year, respectively after the first rate cut on July 30, 2019. Meanwhile, the S&P500 of the US rose 1 per cent in three months and 8.1 per cent in a year, according to an analysis by foreign brokerage Nomura on equity market performance during the past six rate cut cycles. The brokerage concluded that economic conditions that necessitate the cuts and starting valuations into rate cut cycles hold the key.
هذه القصة مأخوذة من طبعة August 02, 2024 من Business Standard.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة August 02, 2024 من Business Standard.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
FY25 as weak-earnings year is gradually getting priced in
Even as many blame record foreign portfolio outflows for the market downturn, the real culprit is weak earnings amid rich valuations, says GAUTAM CHHAOCHHARIA, head of global markets, India, UBS. In an interview with Samie Modak in Mumbai ahead of the UBS India Summit, Chhaochharia highlights that 2024-25 (FY25) weak earnings growth is now factoring into market expectations. Investors are shifting their focus to the actions of the Reserve Bank of India (RBI) and the central government, as well as the outcome of upcoming state elections. Edited excerpts:
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Re-examine trade pacts
India must consider entering CPTPP, RCEP
