Global markets are undergoing a reset as the era of cheap money ends, but this does not signal a breakdown in economic growth, Nirav Karkera, Head of Research and Fund Manager at W by Groww, said.
Major central banks are raising interest rates again, while bond yields are climbing globally. Energy prices and geopolitical tensions, particularly in the Middle East, have emerged as key swing factors for inflation and financial markets.
He recommended focusing on structural themes that extend beyond any single market cycle, including India’s investment cycle in power, infrastructure and defence; the push towards electronics manufacturing; and the steady growth of domestic consumption and financial savings.
Well-managed banks and financial companies, which have corrected despite maintaining healthy balance sheets, also warrant closer attention. Fixed income presents another opportunity, as higher interest rates allow investors to lock in attractive yields after a prolonged period of relatively low returns, Karkera said in an interview with Moneycontrol. Here are edited excerpts:
Are we witnessing a global reset? What changes can we expect?