Speaking to CNBC-TV18 Bob Doll, Chief Equity Strategist & Senior Portfolio Manager of Nuveen Asset Management said the impressive run in equities is likely to continue. "Brexit fears were overdone."He says the genesis of the rally is earnings growth. Many global partners believe long-term view of India remains positive. The education, resources, the desire to grow and the massive population are positives for India, he said.
The fear of Brexit has made the US Fed to back of, he said, adding that he expects the US Fed to raise rates.
He says the dollar moving up relative to the emerging market currencies is healthy for the rest of the world.
The next big trigger for global markets he said was economic and earnings growth. Equities will drive up stock prices, he said.
Below is the verbatim transcript of Bob Doll’s interview to Reema Tendulkar & Sonia Shenoy on CNBC-TV18..Sonia: World over the markets are at record highs. From your vantage point do you expect this run to continue?A: Yes, my view is that the run in equity is likely to continue, the new highs in the US is significant. Brexit fears were overdone as we know. We have had a rally in oil prices which prevents some other financial problem that people were concerned about from getting worse. The key would be economic and more importantly earnings growth and we will get marginally better growth in the US and some other parts of the world enough for equities to make a bit of a run from here. Not big games but worth playing.Reema: What is the genesis of this US market rally. Why are market so buoyant despite issues like Brexit?A: The genesis or the rally is earnings. Somebody said to me recently observing that the US stock market was basically flat for six quarters. And my response was yes, earnings was flat for six quarters. Earnings drive stocks and we are beginning to see improvement in earnings. In the US for example the earnings recession troughed in the first quarter, second quarter would be closer to flat year over year and then the back half of the year we should get better earnings. So, to me the genesis of the equity rally is improving earnings.Sonia: How are you and your global partners approaching India now? Are global fund managers increasing their allocation to emerging markets like India?A: Being a US equity manager only I only invest in US equity stocks but many of my global partners believe that the long term view of India remains positive. The education, the resource base, the desire to grow, the massive population, all these things are positive for India. Obviously emerging markets in general have struggled with this slowing growth in China. The debt problem, the issues of slowing commodity prices. We are coming out of some of those things. Of course, that has allowed emerging markets like India to have a better move in here and there is more to come.
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