In a chat with ET Now, Harsha Upadhyaya, CIO - Equity, Kotak AMC, says India is in a much better shape compared to the rest of the economies at this point of time in terms of interest rates. Edited excerpts:
The Fed intention of three rate hikes as opposed to two indicates a slightly hawkish tone. We do not know whether they will eventually do that or not but do you reckon that the markets by and large could be nervous because of this slightly hawkish tone from the US Fed?
If you look at the kind of interest rate hike that happened, it was more or less in the price. I think 25 bps was what was expected and that has come through but what is more hawkish compared to market expectation is the expected three rate hikes during calendar year 2017. Markets seem to be taking comfort in the fact that even in the year end last year during the policy meet they had indicated there could be four interest rate hikes during calendar year 2016 but in the end you saw only one and that too in the month of December. So to that extent, may be market is feeling a little bit comfortable that Fed may not be able to do three rate hikes ultimately. That is the view that the market is taking at this point of time but it is too early to say that everything is discounted and there would not be nervousness.
