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Quote on Morning Market 15 December 2022 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"Even though the Fed downshifted the rate hike to 50 bp as expected, the tone of the commentary was unexpectedly hawkish. The FOMC statement, “the ongoing hikes will be appropriate to reach a sufficiently restrictive stance that returns inflation to 2% over time” is hawkish but the market seems to ignore this expecting inflation to cool down earlier than Fed’s expectations. Globally, equity markets would be watching out for the ECB and BoE decisions today, which are also likely to be 50 bp hikes. The Indian market, though not completely decoupled from the mother market US, has been charting a slightly different path exhibiting surprising resilience even in the face of global weakness. This is due to India’s superior growth and earnings prospects, going forward. However, high valuations and rising interest rates are likely to restrain the ongoing rally. Fixed income assets are becoming attractive."

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