IGI Logo

The dominant trigger pushing the global equity markets up or down this year has been the economic data from the mother market US. This data has not been consistent and, therefore, the markets have been volatile responding to alternate bouts of positive and negative news. The disinflation trend pushed the markets up while data indicating a strong economy and tight labour market pulled the markets down. This see-saw movement appears likely to persist for some more time. The latest negative factor, from the market perspective, is the Fed chief Powell’s comment that “the ultimate level of interest rate is likely to be higher than previously anticipated”. So, markets are pricing in a 50bp rate hike in the next Fed meeting on March 21-22. In the near-term investors may adopt a twin strategy of opting for attractive fixed income returns with incremental investable funds while continuing to buy high quality stocks on market weakness. 

Above views are of the author and not of the website kindly read disclaimer