Equity market rally may have sputtered but these experts share why India may remain unruffled

The rally in the equity markets that started in March and continued till mid-June appears to have taken a knock largely because four central banks last week raised rates and the FOMC earlier in its dot chart surprisingly indicated that it sees two more rate hikes in the US. Yields have risen in the US from March lows of 3.4 to 3.8. In the currency market, the rupee is caught in India between a stable to soft dollar and a continuously weakening yuan. And the RBI usually doesn’t like the rupee to strengthen when the yuan is weakening.

Four big central banks, including of Turkey, raised rates. Bank of England raised by 50 basis points, which is the highest since the global financial crisis of 2008. And that is because their inflation came in at 8.7 percent. The Swiss National Bank was the one that was lesser expected because Switzerland is the country with the lowest inflation, but even there, people were expecting 50 basis hikes. Norway's central bank called the Norges Bank has upped rates by 50 basis points. And this, like in England, is taking the overall rate to 5 percent, which is 15 years highest since 2008.

In an interview with CNBC-TV18, Neeraj Gambhir, Group Executive and Head-Treasury, Markets & Wholesale Banking Products at Axis Bank and Steve Englander, Global Head of G10 FX Research and North America Macro Strategy at Standard Chartered Bank spoke at length about where rates and currency are headed both globally and in India.