Terming the current rally in Indian markets as a relief rally, Zee Business Managing Editor Anil Singhvi said the softening of commodities, including crude oil, will give comfort to the benchmark indices during a special edition of Editor’s Take on Wednesday.
According to Singhvi, the US Fed is currently at a tightrope between controlling inflation through rate hikes and taking the US economy into recession. The global economies are battered the inflation issue mainly erupted due to geopolitical tension between Russia and Ukraine war.
As the central banks across the globe has started taking steps against the rising inflation by raising the interest rates, this has shown an impact on overall commodity prices, the managing editor said.
Crude oil has been continuously softening in a staggered manner on the fear of demand destruction, perhaps, due to the US economy likely entering into recission. Singhvi views this as positive for the Indian markets as well as the economy as lowering crude oil prices would highest trigger for India.
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He said, if the US economy enters into recession, it’s obvious, that the US markets would fall and the same impact may also likely be seen on Indian equities too, however, the best part would be the crude oil easing as with this India’s 75 per cent of inflation will go away provided oil comes in double-digit.
The managing editor added that for India growth was not a concern, as our economy is improving, however, inflation is acting as a deterrent to it and will only come down with we reducing our import bill and strategic rate hikes by the Reserve Bank of India.
While citing situations, Singhvi said, if crude comes in the range of $120-125 per barrel, the Indian market will be negative, if it comes around $100-105 per barrel, it will be neutral, however, the big relief and upward rally in the market is only visible when crude trades between $70-80 per rally.