Emerging markets to grow once commodity pressures cool down: BoA ML

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Indian market has shown a greater level of resilience and steady performance despite facing issues like aggressive oil rates and inflation creating a volatile environment for the indices. In fact, crude prices have been ruling the movements of all emerging markets and in the view of analysts; it is going to be difficult to nail down crude completely. 
 
In an interview with CNBC-TV18's Mitali Mukherjee, Jyotivardhan Jaipuria, head of research at the Bank of America Merrill Lynch, said that emerging markets like India will start performing once commodities like crude start cooling off.

Talking positively on India's performance, Jaipuria said that valuations of the Indian market are quite reasonable at present and sectors like banking, pharmaceuticals and IT will succeed in marking growth. Infrastructure, however, does not seem very promising as far as growth prospects are concerned.

"Inflation is still a big issue, which India will need to resolve," he added.

Talking about Indian equity markets, he said, "I think markets have effectively been consolidating for the last few months and this consolidation will continue for the next few months. We are just going through one of these slow grind phases before we start moving up again."

Compared to developing markets, developed markets will achieve better growth in the short-run, he said, adding that developing markets will be positive in next three to five years.

"So the tactical trade is to buy in the developed market for the short-term but over the longer-term the emerging markets will do very well," he concluded.

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