Indian mkt to reach new highs in 2010: Roubini firm

The continued weakness in the US dollar due to America’s easy monetary policy may be a boon for emerging market (EM) equities like India, believes Arnab Das, Managing Director of Market Research and Strategy, Roubini Global Economics.

In an interview to CNBC-TV18, Das said, “The US Federal Reserve has to keep interest rates at or very near zero for an extended period of time because the financial system needs to repair itself. The free money conditions will continue for a long time. There will be large capital outflows from developed countries especially US to other parts of the world. The main beneficiary of those capital outflows is going to be EMs, as a whole and some countries in particular.”
Das, part of the team headed by Nouriel Roubini (the economist who foresaw the global financial crisis of 2008), said he was bullish on equities in India and Brazil. “We think India is going to do quite well, as are most large EMs for quite come time to come, relative to the developed world.”

Given the rush of liquidity floating and the in the global economic setup and the continued weakness in the dollar, Das said it was likely that emerging markets like India would reach fresh next year.

Read the full interview on next page