Expect more downside risk in US than India: Credit Suisse's Dan Fineman

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A higher downside risk is expected in the US markets compared to India as the Federal Reserve is seen raising interest rates in the near term, said Dan Fineman, co-head of equity strategy - Asia Pacific at Credit Suisse.

"So, there are a number of headwinds facing American stocks. In India, we have some problems ... but the economy is doing much better than what we will be getting from the US," he told in an interview to CNBC-TV18.

Sharing his thoughts on global markets, Fineman said investors are being too optimistic about market conditions as he expects a recession to hit the United States in 2023.

"We're concerned that markets are still a bit too optimistic about what happens in 2023 ... we think that (interest) rates will stay high next year," he added.

In the outcome of the Fed's September policy meeting minutes, Fed officials agreed that they needed to raise interest rates to a more restrictive level, and then maintain the status quo for some time, to meet their goal of lowering 'broad-based and unacceptably high' inflation.

At last month's meeting, Fed officials raised interest rates by three-quarters of a percentage point for the third straight time in an effort to drive inflation down from 40-year highs; Fed Chair Jerome Powell vowed afterward that they would "keep at it until we're confident the job is done".

Also read: Fed officials worried more about doing too little on inflation than too much

Talking about India, the investor said that the economy has been performing well globally, but in an Asian context, markets like Thailand and China likely have a better outlook.

"India, I think in a global context looks pretty good. But in an Asian context, I think there are better opportunities elsewhere," he explained.

Fineman also mentioned that he expects the US dollar to retain its upward trend against major global currencies this year. The US dollar has been moving near multi-year highs as investors remain worried about rising interest rates and geopolitical tensions related to the Russia-Ukraine war.

Also read: Dollar edges higher, yen slips toward level that prompted intervention