Inflation remains a key reason for the current market rout, Sunil Singhania, Founder of Abakkus Asset Manager LLP tells Zee Business Managing Editor Anil Singhvi in an exclusive interview. In order to contain inflation, a back-to-back interest rate changes happened - one by the Reserve Bank of India by 40 bps (basis points) while the other by the US Federal Reserve by 50 bps, he said. 

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This has created an environment, where there are expectations that the interest rate would go up further, the founder said. He said that the volatility or market fluctuation is stemming from the fact that everybody is selling when the markets are falling while buying when they are rising.

Domestic stock markets closed in the red on Wednesday amid high volatility. While the Sensex fell by 276 points or 0.5 per cent closing at 54,088.39. 

However, it is logical to assume that there would be no problem in the Indian market in the long term basis, said Singhania. He also stated that the market had reached a point where a correction was required.

The ongoing Russia-Ukraine war has impacted commodity prices, currency and global markets have been falling. Ultimately, investors are the ones facing all this uncertainty, he further said.

Counting the positives, Singhania said that metal prices are down 15 percent, oil price, which was once hovering around USD 130-135, is now down to levels around USD 100-105. He was also hopeful, that the prices of crude will come down further in the event of a positive news. He expects a correction between USD 10 and 20.

His advice to experts is to remain positive arguing that people who have been optimists in India for the last 20-25 years have done well in the market. Additionally, staying positive will help people find buying opportunities rather than just selling in the market.

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