Fed's postponed tapering positive for Asia: StanChart

Sarah Hewin, senior economist, Standard Chartered believes the US Federal Reserve's decision to pull back from tapering is a positive for Indian market. However, she adds, there are still some risks with regards to the US, mainly concerns surrounding the debt ceiling, etc (Read More)

Below is the verbatim transcript of Sarah Hewin's interview on CNBC-TV18 Q: Do you think the trend of consolidation is likely to continue for the European markets? How is the flow picture with regards to European equities?
A: Let us look at what might upset the market. We had the general election last Sunday. The results came very quickly but we still don’t know what the makeup of the government will be. Tomorrow there will be a decision from the likely coalition partners, the social democrats on whether to join coalition negotiations. So that could put a spanner in the world if they decide that they don’t want to join up with Angela Merkel.
Also on Sunday, we have Australian elections, wouldn’t normally be too concerned about these but we see the nationalist right wing gaining support. So, there is a chance of a shock there and in the meantime, this morning closer to – much sooner today, we will shortly have some economic data, which has been bad over recent months. So, they may indicate what is happening for Q3 in the euro area economy, so as always with Europe, it is sort of politics and the economics that influences markets and has the potential to bring about a shock either on the upside or on the downside. Q: How would you approach the Asian pack at this point and what would India stand at within the Asian region?
A: We had a summer of convulsion driven by the tapering story. Recently, since Fed decided to pull back from tapering, we see a more positive outlook. But there is still some risk around with concerns from the US. Concerns about the debt ceiling talks and the potential for a government shut down and October 1, the key date are now approaching quite quickly.