The current rally seen in most emerging markets (EMs) on the back of US debt ceiling agreement is likely to continue, says Richard Gibbs, global head, Macquarie Securities. President Barack Obama on Thursday signed the legislation that ends the US government shutdown and raises the US debt ceiling.
Speaking to CNBC-TV18 Gibbs said that with this development, it is likely that the US Federal Reserve might push its QE tapering plan to next year. Also Read: Worst of earnings not behind us; IT safe haven, says Geosphere Below is the edited transcript of Richard Gibbs interview with CNBC-TV18 Q: What is your first call on emerging markets? Do you think the recent outperformance that we have seen over the last two weeks or so from market like India will continue? A: It extends the respite for emerging markets. The big thing for emerging market to come out of the eleventh hour agreement means that Fed’s tapering strategy, I suspect has moved in 2014, which has increased the time margin for emerging markets. Q: What about the US markets in particular, now that one hurdle is out of the way do you see the US market get well pass these all time highs that we are seeing on the likes of the S&P 500 etc? A: Certainly, at the end, it maybe a strong month because they have affectively given themselves Thanks Giving, Christmas and New Year period off from any kind of budget tensions and debt ceiling tensions. But ultimately we need to return to that and that will happen in January and as we move into early February, we will again have that timeline in relation to the debt ceiling. So, it is quite possible that we will see further strength as we move into November, but it’s a temporary and short-term phenomenon.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
