Lull before the storm in financial markets
There is an uneasy calm prevailing in financial markets. Bond markets have been showing an inverted curve for some time now in the rich world. Short-term interest rates are higher…
How to play Budget 2023-24
Expectations drive financial markets. Credit markets look forward to the cues on interest rates and inflation, while equity markets look to those about corporate profits. It is the final full…
Is the India de-coupling story sustainable?
The year 2022 brought turmoil to financial markets. Rising interest rates and inflation took the wind out of equity prices. Major indices in the US, Europe and Asia shed 20-30%…
How to play India’s banks as interest rates rise
If you plot a chart of the S&P BSE Sensex and the Bankex, an index that tracks the banking sector stocks, you will find a linear correlation for most of…
Investing in the times of a storm
Global financial stability risks have increased, and the balance of risks is significantly skewed to the downside. Several risks highlighted a few months ago have crystallised, says the latest Global…
How to balance portfolio with diversification
The world is staring at a recession. If the latest announcement from the World Bank is believed, high inflation worldwide could push interest rates higher and the world into a…
What do rising interest rates mean to your portfolio?
In a surprise move last Wednesday, the Reserve Bank of India's monetary policy committee hiked key borrowing rates to curb rising consumer price inflation (CPI). The upward limit of the…
FED SPEAK: QE, Taper Tantrums & Rising Interest Rates
Monetary Policy is an interesting weapon in the hands of Central Bankers. In fact, it wouldn’t be too outlandish to surmise that Central Bank policy actions have influenced outcomes of…
RBI’s conundrum – the rupee or bond yields?
On expected lines, the Reserve Bank of India (RBI) started the financial year with a Dovish Monetary Policy stance - an accommodative monetary policy that keeps interest rates low to…
Inflation and Stock Markets
When important government institutions announce critical decisions, one has to go beyond the obvious implications of those decisions. This is clearly evident in financial markets. When central bankers worldwide almost unanimously cut policy interest rates and infused liquidity in financial markets to revive economic growth, there was a critical outcome which prudent investors and observers had to bear in mind: Inflation. The resultant impact simply can’t be ignored. Increasing supply of liquidity and loose monetary policies globally ensured rapid resumption of asset prices and economic activity. But the increase in money supply also creates a real inflation challenge.
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