Citi says its India outlook won't change because of China pickup
Speaking in an interview to CNBC-TV18, NC Badriniwas, MD and Regional Head of Markets and Treasury-Asia Pacific at Citi Bank said that despite the challenges posed by COVID-19, India will continue to perform well and receive a fair share of flows.
Global and Indian markets are in the grip of multiple and contradictory forces. The S&P and Nasdaq have rallied sharply in 2023 hoping for an end to the rate cycle of the Fed. But the red-hot January jobs data has thrown a likelihood of even more rate hikes; in India, an excellent Budget with big capex promise, restrained deficit is getting countered by volatility in the Adani group stocks and China emerging as a rival destination.
Speaking in an interview to CNBC-TV18, NC Badriniwas, MD and Regional Head of Markets and Treasury-Asia Pacific at Citi Bank said that despite the challenges posed by COVID-19, India will continue to perform well and receive a fair share of flows.
He said, “After the whole deep COVID, there is a reasonable momentum back in the economy, and therefore, one would expect a reasonably strong data coming out of China in the coming quarters, but from India point it doesn't necessarily change the outlook.”
However, Badriniwas also said that there may be some rebalancing between China and India as India currently has high valuations. On the other hand, he highlighted that there is reasonable momentum returning in China following the pandemic, largely due to the country's recent efforts to open its economy.
Regarding monetary policy, he expects the Reserve Bank of India (RBI) to hike rates tomorrow, February 8, but does not anticipate any significant shifts in the central bank's stance. This comes as the RBI continues to navigate the delicate balance between supporting economic growth and maintaining financial stability.
The RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) started its three-day meeting on Monday, February 7, amid expectations of a smaller 25 basis points rate increase to signal a pause on the rate hiking spree that started in May last year to check inflation.
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(Edited by : Pradeep John)
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