Equity markets are headed towards a bear phase: Mark Matthews, Julius Baer

Business Standard’s Puneet Wadhwa speaks to Mark Matthews, head of research for Asia at Julius Baer to get his views on the road ahead for global equity markets as they adjust to rising interest rates

Topics
Mark Matthews | Julius Baer | global equity

Puneet Wadhwa |
New Delhi


Q1: With the US Federal Reserve and the RBI making their intent clear, how do you see global equity markets play out in the rest of 2022?
Ans:
> They’ll be choppy; many moving parts in the markets

> Aura of uncertainty hanging over markets
> More chances of downside than an upswing
Q2: So are you a buyer on dips or a seller on a rise?
Ans:
> Buyers need to be nimble
> Outlook is uncertain; do not advise people engage in active trading
Q3: Is the global equity market headed towards a bear phase and give negative returns in 2022?
And:
> Possible that equities are headed towards a bear phase
> Market trajectory has taken a U-turn
> Overall direction does not look positive
Q4: Where does India stand in your pecking order? Which other regions look more lucrative?
Ans:
> India has outperformed most regions YTD
> Domestic investors continue to buy stocks; untapped potential
> Rising oil a headwind for the Indian economy
> Earnings growth in FY23 will come from sectors not dependent on commodity prices
> Indian equities to perform in-line with global peers
Q6: Inflation fears have been known since quite some time now, but the selling over the past few days and weeks have been brutal. Has the sell-off been overdone?
Ans:
> Markets have been surprised over the past few weeks
> Assuming we’re in a bear phase, three-fourths of the pain is over
> US Fed tightening expectations will prove to be exaggerated
> Signs that economic growth is starting to slow; will help in cooling inflation
Q7: Investment-worthy stocks and sectors in the Indian context?
Ans:
> Stocks not overheated; global cues in focus
> Markets trading on macro events rather than fundamentals
> Commodity producers likely to do well

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First Published: Wed, May 11 2022. 07:00 IST

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