Ritesh – widely regarded as a macro expert – is worried about signals emanating from outside as well as within the country. Rising oil prices and sticky core inflation could lead India towards stagflation. By this stage of the cycle, corporate capex should have picked – which hasn’t happened, and Govt spending should be reducing – which is not: the question therefore is whether we are in day 3 or perhaps already in day 5 of this test match (market cycle) With a fundamental shift in US policies, countries dependent on global trade or dollar funding can run into serious trouble. Simultaneous rise in US dollar, US bond yields and US equity markets will spell significant trouble for many economies and markets – and we are already seeing signs of all three asset classes rising in unison.
| 