India’s central bank, the Reserve Bank of India (RBI), is preparing for more aggressive rate cuts, which could support the country’s markets, according to Danielle DiMartino Booth, CEO and Chief Strategist at QI Research.
Booth believes India remains a key player among emerging markets. Despite high valuations, the country benefits from a young and educated workforce, which continues to attract global companies outsourcing professional services. She added that this demographic strength gives India an edge over many developed economies facing labour challenges.
The RBI’s Monetary Policy Committee (MPC) meeting is underway, with a decision expected on Friday, December 6.
Booth is concerned about the equity markets in the US, citing multiple valuation metrics that point to overpricing.
She pointed out the importance of revisions to economic data, such as personal income and employment figures, which have often painted a weaker picture of the economy.
“When we had the last revision come out, personal income in the United States was revised down for the second quarter by $91 billion, leaving only $65 billion for the entire quarter. So when you see revisions of a magnitude that wipe away 1.2 million jobs for a given year and more than cut personal income in half, I would say that from the perspective of the Federal Reserve, you have to be very careful about how you interpret the immediate economic data versus what the revisions then show months later,” she noted.
Layoffs and rising bankruptcies indicate challenges in the broader economy, even as official reports show optimism in some areas.
Discussing the surge in cryptocurrencies with bitcoin hitting fresh highs, Booth said, it remains a speculative asset and is not yet a true currency as it lacks the qualities of a reliable store of value or medium of exchange.
She noted that reduced regulation could encourage more participation, but its current appeal is largely tied to global risk appetite and a rejection of fiat currencies.
Prices of Bitcoin, the biggest cryptocurrency, crossed the mark of $1,00,000 on Thursday, December 5, days after hovering around these levels. The cryptocurrency has staged a strong upmove since Donald Trump’s return to the White House.
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