Expert Insight on impact of US Elections, Budget, Rate cut on Equities and debt market by Mr. Avnish Jain, Head – Fixed Income
Below the Expert Insight on impact of US Elections, Budget, Rate cut on Equities and debt market by Mr. Avnish Jain, Head – Fixed Income
“Following President Trump’s tariff measures on Canada, Mexico, and China, the global markets have experienced significant volatility. In reaction, equity markets, including those in India, faced considerable upheaval. Meanwhile, the US Federal Reserve decided to maintain its position, as inflation remained persistent and growth continued to be strong.
The budget in India came as a pleasant surprise with income tax reductions favoring the middle class where up to 12 lakh of income was made tax free and various other cuts were done to benefit other taxpayers as well.
We expect that the RBI will conduct OMO operations in March and April to ensure that the liquidity remains ensure that liquidity remains near positive and not a big deficit as was earlier which could hamper growth. In regard to trading, debt markets will most likely fluctuate within the range of 6.5-6.65%, even after a rate cut as market would be looking at global events as well.
As rates fall in the front end of the curve, the long bond having to catch up, they should provide opportunities for investors based in funds like gilt, income and dynamic bond fund. As intractable, investors must keep in mind their risk profile and their tenure of investment while investing in the mutual funds.”
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