India Market Outlook: Chris Wood, in an interview with NDTV Profit, said he expects the Reserve Bank of India could raise interest rates twice in the coming months, while highlighting crude oil prices as the most important factor currently shaping the Indian market.
Wood said he “will be surprised if the RBI doesn't raise rates”, adding that the Indian markets are clearly focused on crude prices. He also said oil prices have not risen as much as expected despite a prolonged war.
‘RBI May See 2 Rate Hikes In Coming Months'
Wood expects the RBI could see two rate hikes in the coming months, with crude prices playing a central role in the market and policy outlook.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
He said, “Oil prices is the most important factor in play,” while noting that Indian markets are clearly focused on movements in crude.
Wood also recalled that weakness in the rupee had been a major headwind last year.
‘AI Supercycle Is Dominating Indian Markets'
Wood said the AI supercycle is dominating Indian markets, but also flagged concerns around the monetisation of capital expenditure linked to artificial intelligence and semiconductors.
ALSO READ: 'Capital Markets Megatrend To Continue, Small Caps To Outperform': Nimesh Chandan
According to him, “a lot of AI, semicon capex may not get monetised.”
At the same time, he said IT services companies are witnessing a structural re-rating.
India Has Potential In Mid-, Small-Caps
Wood said India's market also offers significant potential in the mid- and small-cap segments.
He pointed to India's strong capital market and mutual fund industry, along with its “huge amount of human talent”, as structural positives.
Wood, however, said India's Nifty index is “very capped”, while noting that the country's economic growth has “surely accelerated.”
US 10-Year Yield Above 5% Would Be ‘Big Negative'
Wood also highlighted US bond yields as a key factor for markets.
He said a sustained US 10-year yield above 5% would be a “big -ve” for markets, adding another global variable for investors to track alongside crude prices.
Private Sector Participation In Energy Rises
Wood also noted that private-sector participation in the energy space has increased, pointing to a broader shift in the sector.
His comments come against a backdrop in which oil prices, interest rates, AI-led investment and global yields remain key variables shaping the outlook for Indian equities.
ALSO READ: Hero MotoCorp: Festive Season Holds Key To Re-Rating; JPMorgan Remains 'Overweight'
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
