The world economy has been grappling with numerous challenges, including trade tensions, geopolitical uncertainties, and the lingering effects of the COVID-19 pandemic. The risk of a global recession has increased in recent times, and investors need to be cautious.
In an interview with CNBC-TV18, Rupal Agarwal, Senior Research Analyst-Asia Quantitative Strategy, Bernstein said that the risk of a global recession has increased.
She said, “We do think that the risk of a global recession has increased since the beginning of the year and hence we are still taking more of a balanced approach across the region, including even for a market like China, where we do think that we are very close to a market bottom.”
Amidst the concerns surrounding the global economy, Agarwal believes that China's market is nearing a bottom. This assessment implies that the Chinese market may be reaching a point where it is less likely to experience significant downward movement.
Agarwal expressed her worries regarding Asian markets, excluding China, over the next 12 months. While China's market may be approaching a bottom, other Asian markets face their own set of challenges. Factors such as slowing growth, geopolitical tensions, and policy uncertainties contribute to the concerns. Agarwal's cautionary stance reminds investors to diversify their portfolios and adopt a cautious approach when considering investments in Asian markets.
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Talking about India, she said that Indian market valuations have come down. This observation suggests that the Indian market has experienced a decline in the prices of listed securities relative to their underlying fundamentals. While lower valuations could present attractive opportunities for investors.
“When we started the year, we were much more positive on China and much bearish on India. Our bearish view on India has likely come down because of valuations coming back to 10-year average levels and the disconnect that we were seeing between market valuations and the 10-year bond yields in India, that has completely normalized,” Agarwal added.
For more details, watch the accompanying video
(Edited by : C H Unnikrishnan)
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