Bank of England: Wells Fargo strategist feels little changed for markets after BoE action

The Monetary Policy Committee’s target of an annual £80 billion ($85 billion) reduction of its gilt holdings remains unchanged, the bank said, with the first gilt sales — initially slated for Monday — now taking place on Oct. 31.

On the move, Uday Kotak, CEO of Kotak Mahindra Bank, tweeted that the Bank of England did an about turn and is buying Gilts.

Talking about the move's impact on the global market, Gary Schlossberg, Global Strategist, Wells Fargo Investment, told CNBC-TV18, “If it really began to unsettle the global markets, the Federal Reserve would have to take note. But at this point, the Fed remains focused on inflation. And staying with, we think that hawkish monetary policy, pointing toward a fairly aggressive move in November, and perhaps December.”

He further added that the driver for the Bank of England's action was to try to stave off instability. It was not an improvement fundamental. "So, with that view, yes, little has changed fundamentally, certainly for the United States and the rest of the global markets."

Antoine Bouvet, a senior rates strategist at ING, told CNBC that if the volatility in the gilt market persists, the Bank of England might need to prolong the bond purchases beyond the first two-week window, and another increase in interest rates was not ruled out.

The Indian economy growth is beginning to slow, said Schlossberg. “In India there will likely be a growth recession rather than an outright decline in GDP. I am not even sure I call it a growth recession, but certainly a winding down of economic growth that creates uncertainty in the market,” he said.

He advised investors to move into more defensive sectors, be less economically sensitive, and stay with the quality companies, larger companies, with healthy balance sheets to ride out.