India's position better than other emergings markets: Arindam Ghosh, BlackRidge Capital Advisors

In a chat with ET Now, Arindam Ghosh, CEO, BlackRidge Capital Advisors, shares his outlook for the market.

ET Now: How are you reading the market mood? There has been a fair amount of profit-taking; then a good recovery was seen yesterday. Does it seem like the market is now in profit-taking mode, or do you think there is a further correction in store for us?

Arindam Ghosh: The cues from the US Fed have indeed been very positive. Clearly, there has been no surprise as far as the language of the Fed is concerned. In fact, the Q2 GDP has surprised with its positives. This, along with the fact that unemployment numbers have also been in line with expectations, has allowed the Fed to carry on with its tapering programme.

So, we expect normalisation to kick in by the end of October. From the global point of view, the environment today is supportive. The FED chair has been mentioning that there are no visible signs of asset bubbles as yet. It gives a lot of comfort, although the global risk appetite for junk bonds has been quite scary.

Domestically, relative to other emerging markets, we are definitely at a much better place. If you look at markets like Brazil, Turkey, South Africa, Russia and even China, growth there has actually been moderating. From this viewpoint, India clearly stands out.

From the perspective of global allocation to emerging markets, India still continues to be standing quite tall. Of course, we will have to wait and see how the next Fed meeting plays out in terms of what kind of signal comes out regarding Fed’s medium-term outlook on long-term rates.

That is going to be critical because there is always this lurking fear that inflationary expectations in the US can impact the situation elsewhere. So, that probably is a big risk which may appear somewhere on the horizon.

But we are still some distance away from it. Domestically, the earnings have been quite good. Numbers have surprised us on the positive. So, overall, India is well poised.