Nifty at 20k: Here’s Atul Suri’s take on what can stop the market rally

Atul Suri highlighted how earlier market sentiment believed that the year end meant bottoming of the rate hike cycle. However, today the narrative is different as further rate hikes are expected

The markets appear bullish, however, one must heed caution towards the rising US bond yields, said Atul Suri of Marathon Trends-PMS, in an interview with CNBC-TV18 on September 12.

Suri stated that as the US bond yields are nudging to make a new highs hovering around 4.2 or 4.3 percent, this global phenomena may affect the Indian markets adversely.

The market expert explained how bonds and equities are correlated. “The last time when US bond yields were at 4 to 5 percent, the S&P 500 US market was at its 52-week low” said Suri.

He highlighted how earlier market sentiment believed that the year end meant bottoming of the rate hike cycle. However, today the narrative is different as further rate hikes are expected.

“The narrative that inflation and bond yields have peaked out is getting pushed”, said Suri. The market expert believes that changing global narratives, such as increased inflation and resultingly increased crude prices, can dump in the Indian market rise.

On September 12, Brent traded near the 90-points mark and the nifty closed flat at 19,993.20.

However, Suri remains bullish on the Indian markets, hooking onto the healthy correction pattern that they have been following for decades.

In another interview, Dheeraj Relli of HDFC securities also flagged caution towards the interest-rate hikes and inflated crude prices, causing a direct impact on inflation in India.

Quantum Mutual Fund’s Chirag Mehta upheld the same views stating that global interest-rate hikes may impact the flows into Indian markets. He also highlighted that a potential monsoon deficit could hinder rural economic revival.