19 Dec 2022

As much as COVID-19 and its various outcomes were the talks of global financial markets in 2020 and 2021, 2022 has been dominated by news of inflation – and how it impacts economic growth worldwide.

In India, retail inflation fell to its lowest level in 11 months to 5.9% in November, down from 6.8% in October. This is the first time in 2022 that inflation has come in below the Reserve Bank of India’s upper margin of 6%. *

It is, though, below the inflation in the US for several months now, as indicated in the chart below.

 

Kotak MF - India CPI vs US CPI (Inflation)

 

“While our inflation continues to remain elevated, it has remained well below American inflation for more than 13 months in a row, which is a feat that India has achieved for the first time in its independent history,” said Nilesh Shah, group president and managing director of Kotak Mahindra Mutual Fund.

In an effort to tackle this inflation, the US Federal Reserve has been raising interest rates in all of 2022.

It had, in fact, raised rates by a total of 375 bps to November 2022. The US central bank also raised rates by 50 bps in its meeting last week.

While higher interest rates in the US raise concerns about capital outflow, the trend in India, especially in the last five-six months, has indicated that equity markets continued to gain, as illustrated in the chart below.

 

Kotak MF - Nifty Index - December 2022

 

It will be interesting to see how equity markets in India move from here on. For more insights, watch our monthly outlook video.

 

Kotak MF - Monthly Market Outlook - December 2022

 

 


 

 

*Source: indianexpress.com

This article is for information purposes only. The information provided herein is derived from public sources, believed to be from reliable sources. However, no representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Kotak Mahindra Mutual Fund/ Kotak AMC is not indicating or guaranteeing returns on any investments. Past performance may or may not be sustained in future. Readers should seek professional advice before taking any investment related decisions and alone shall be responsible for any decision taken.

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© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.