Frederic Neumann, Economist, Asia Pacific, HSBC said that 50 bps cut by the Fed was a huge surprise and is pricing in further cuts and because of the rate cut by the Fed, there is sense of relief in the Asian markets. But he don't expect aggressive rate cuts by the Asian Central Banks but the hikes may stop as inflationary pressure in Asia is high. India is relatively less coupled with US economy, he said. Liquiditity has improved since the fed cut rates, which has fueled flows in Asia and these liquidity flows to Asia will continue and will benefit asset classes, he believes. Higher interest rates in Asia also fuels the inflow of funds into Asian markets.
Asian econmies are less senistive to US slow down now than they were earlier, he believes. Asian markets echo US sentiments despite decoupling. Asia looks quite robust and within the assets class also expects equities and commodities to show strength going forward.
HSBC has set target for Sensex of 16,000 by 2007 end and 19,000 by 2008 end.
He also said that he expects India and Asia to decouple from US economy and to steer clear of US credit markets' woes. He believes that volatility in Indian markets might remain elevated for some time.
Asian econmies are less senistive to US slow down now than they were earlier, he believes. Asian markets echo US sentiments despite decoupling. Asia looks quite robust and within the assets class also expects equities and commodities to show strength going forward.
HSBC has set target for Sensex of 16,000 by 2007 end and 19,000 by 2008 end.
He also said that he expects India and Asia to decouple from US economy and to steer clear of US credit markets' woes. He believes that volatility in Indian markets might remain elevated for some time.
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