On India’s position within emerging markets, Dennis stated it as a “low-beta play,” meaning it tends to be more stable compared to other emerging economies. He said that while India performed well in March, it faced renewed pressure when China’s markets rebounded, reinforcing the ongoing China-India trade-off in investor sentiment.
Regarding market reactions to upcoming developments, Dennis suggested that investors are more likely to follow a “sell the rumor, buy the news” approach rather than react with a major sell-off. However, he stated the prevailing uncertainty, making it difficult to predict market moves with certainty.
Also Read: Why India should not lower tariffs on auto imports: Explained
Discussing the US economy, Dennis expressed concerns over a potential recession, which he sees as an increasing possibility. He said that while a weaker dollar might provide some support to emerging markets, a slowdown in the US would likely hurt equities globally. The additional pressure from tariffs could also drive up inflation, making it harder for the Federal Reserve to act decisively.
On interest rate expectations, Dennis maintained his forecast of two Federal Reserve rate cuts in 2025, one in June and another in the second half of the year.
Also Read: US tariffs less worrisome for India; financial market risks loom larger, says Axis’ Neelkanth Mishra
However, he stated that if the US economy weakens significantly, more than two cuts might be necessary. “I’m very worried about the US economy, frankly,” he said, suggesting that economic weakness could force the Fed’s hand.
For the entire interview, watch the accompanying video
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(Edited by : Unnikrishnan)
