'Intl oil prices, low US rate hope bode well for India'

Below is the verbatim transcript of Steve Brice's interview with CNBC-TV18's Latha Venkatesh and Sonia Shenoy

Sonia: We have weak global cues that are stacked up this morning and the fear is that our market will not be too far behind in this global sell-off. What is your view on how emerging markets like India will take it?

A: I think it is different, favourable for India relative to everybody else because once you have an environment like this, clearly there will be some impact in the short-term in terms of potential weakness for the equity market for instance. The thing that makes it very different for India obviously is the benefits of falling oil prices that helps protect the situation significantly. So one can argue that actually this falling oil price and low US interest rate expectations could be positive for the Indian market. In the short-term that is probably not necessary in absolute terms but certainly should be in relative terms.

Latha: What is the call for the remainder of 2014, do you see much more damage to developed market equities, will emerging market equities underperform developed by which I mean US equities and what is the story in commodities?

A: One point that we would make is that if you look at the volatility in the bond market which was really playing catch-up for volatility in other asset classes that was seen in recent times. Once you get their, the last time we have been at the volatility we saw last night was in 2011 and towards the end of the selloff that we saw in the that August September period. So from that perspective it may suggest that we are getting close towards the end of the capitulation and we may see it form a base. It may take some time of course.

I think the key thing from our perspective is going to be what policy makers say and do from here. Obviously we have had those reassuring comments from Yellen overnight from what was talked about in recent meetings. Everybody is watching China, not expecting too much from them but then Draghi and indeed from Europe. Whatever they say in response to what is going on is really critical.

Latha: So in a country like India you would be a buyer over 100 points of the Nifty, how would you treat the fall, are we going to see capitulation as in another 10 percent fall or do you think people will start bottom fishing may be much more quickly?

A: I really doubt that we are going to see that much more weakness from here for the Indian market. There are a lot of bullish stories and the local elections going on still but the general sense is still very positive. I think it would take a much harsher international environment really to shake that theme and so if you see 5 percent weakness from here I would be surprised, we have already seen some coming through but ultimately the stock market is going to break higher again.