homemarket NewsInterest rates to move higher, pace of rise can be a concern, says Barclays' Julien Larfargue
Interest rates to move higher, pace of rise can be a concern, says Barclays' Julien Larfargue
The equity market can go higher as long as the interest rate rise is in control, said Julien Larfargue, Head of Equity Strategy at Barclays. Speaking to CNBC-TV18, Larfargue said that the pace of interest rate rise could be a concern.
The equity market can go higher as long as the interest rate rise is in control, said Julien Larfargue, Head of Equity Strategy at Barclays. Speaking to CNBC-TV18, Larfargue said that the pace of interest rate rise could be a concern.
“If interest rates go up, equity will still go up. Rates are going up on the strong economic recovery expectations, so it will be normal for the rates to go higher. Therefore, higher interest rates are not necessarily a big problem for equity markets. We do expect the rates to go higher and as long as this is controlled, we don’t see it as a big problem for equity markets in general," Larfargue said.
Within emerging markets (EMs), he has a strong preference for Asia over Latin America as he believes that growth may be lower in Asia but, it is more consistent.
“We do like India in the context of our positive view on EMs and emerging Asia in particular. We found those regions to offer very strong economic growth. India was a tough place for a while because of some political uncertainty and exactly what kind of policy would be put in place. It feels like the situation has improved now, the economic growth is coming back, so in the context of the global portfolio we would be very happy to own Indian equity,” he pointed out.
“US equities and emerging markets (EMs) equities are probably the most interesting ones. We are a bit less comfortable on Europe and Japan that is very much at the index level. We do see opportunities in Europe, we do see opportunities in Japan but we would be really focused on stock picking in those two regions”.
The US equity market may still see some modest upside going forward on earnings growth, he said.
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(Edited by : Ankit Gohel)
First Published: Mar 5, 2021 4:48 PM IST
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