“Equity markets are recovering and we are at the early stage of that recovery” said Adrian Mowat, JP Morgan, in an interview to CNBC TV-18. He further added that markets have been driving investors rather than investors driving markets.
He expects markets to continue to move higher towards the first quarter as fundamentals have improved markedly in the last quarter. Also he pointed out that inflation is reducing in the emerging world as is evident from the fall in inflation in India.
There are some positive signs at the global level with better US economic data and a decline in inflationary pressure in both the developed and the developing world. AFP
There are some positive signs at the global level with better US economic data and a decline in inflationary pressure in both the developed and the developing world. Better US economic data is very important because that means that household income in the US is rising in nominal terms. Also, steps taken by the European Central Bank to ensure that the European system remains liquid coupled with a sharp reduction in the spread of Italian and Spanish bond yields versus German bond yields reflects a decline in the European risk.
However, if there is any threat to emerging markets, it if from China as it is having a hard landing with steel and cement production declining.
The Indian markets had a terrible 2011 as it had fallen by nearly 40 percent from the US perspective of a US dollar investor.
Watch the CNBC TV-18 video below -