Vikas Singhania, CEO, TradeSmart is of the view that equities are likely to correct in the near-term mainly due to pressure from tightening from central banks as inflation surges, as we believe inflation will worsen due to entrenched Omicron-induced lockdowns and supply chain disruptions.
Edited Excerpts:
Q) What are your views on the market for the year 2022 after a double-digit gain seen in 2021?
A) 2021 was one of the best years in the market’s history, which has increased expectations of a repeat performance in 2022, especially among the millennials.
However, looking at the gauges flashing before us, it looks like 2022 may be a period of consolidation.
With rising inflation in the US, the performance of the entire world market depends on the US markets. There are various headwinds in the US, especially with the conservative approach taken by the US Democrat President and the predicted risk of tapering the impetus, an increase in the FED rate.
There is also a possibility of an increase in the long-term capital gains and corporate taxes, which can dampen the spirits in the US markets, and with it, the world market.
Add to that the uncertainty surrounding Omicron as well as important state elections in India – it would be difficult to hazard a guess.
Adding to that, domestic red flags like rising inflation and interest rate concern, state elections and a China-led global crisis makes our vision slightly distorted.
Given the limited visibility, we would like to be…
