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Below The Quote on FED Policy outcome view on behalf of Kedar Kadam, Director - Listed Investments, Waterfield Advisors

A) The Federal Reserve has decided to pause for the time being.

B) Fed officials have projected two more rate hikes later this year, following the decision to skip a hike during this meeting. This reinforces our belief that interest rates will remain higher for an extended period, supported by various factors.

Regarding the Indian markets, while domestic inflation trends are indicating a potential cooling off, uncertainties surrounding the monsoon season and a comparison of equity valuations with other emerging markets introduce additional risks. We anticipate an upward risk to domestic inflation, but only time will reveal the true extent.

If global interest rates continue to rise or even remain at their current levels, it is crucial to pay attention to the currency aspect. Therefore, we do not foresee any rate cuts from the Reserve Bank of India in the near term. Additionally, given the significant increase in the cost of capital and mounting risks to earnings, it is essential to approach current equity valuations with extreme caution.

Although India appears to be the most attractive and promising investment option, it is necessary to consider earnings growth in relation to valuation. We cannot ignore the impact of the global economic backdrop and premium valuations on the domestic front. Therefore, we recommend exercising caution and adopting a staggered buying approach. I would like to emphasize once again that the year 2023 is a time for accumulation and a market where stock picking plays a crucial role.

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