Mutual fund investors: There is an atmosphere of panic in the Indian stock market after the US Fed’s statement of increasing interest rates from March yesterday. America’s central bank is more concerned about inflation and it looks like strong growth and employment data will give them enough room to hike interest rates. In such a situation, the big question arises whether Indian mutual fund investors should be worried about the Fed’s move?
Companies will have to pay more for the fund
As you can see, the Indian market also keeps an eye on the signals from the US Fed regarding future rate hikes and interest rates in the economy. Now it is almost certain that the easy money policy will soon become a thing of the past. This means liquidity will decrease. This also means that companies will have to pay more for the funds.
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Impact will be limited to foreign funds in India
India never had the desire to give so much relief and introduce a system of zero interest rates in the economy. Thus its impact on the Indian market will be limited to the participation of foreign funds. Foreign funds will now have the option to invest in bonds with low rates and earn more. So, will foreign funds exit the Indian equity market? off course not. These funds will once again be a safe bet.
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Sentiment of Indian market will deteriorate
The US market is expected to remain under pressure and it will also have an impact on the Indian market sentiment. As such, mutual fund investors who are investing in US stocks and indices should be prepared to face some difficulties.
Market will go through correction and consolidation
Now, what should Indian mutual fund investors finally do? In fact, the market is expected to undergo a correction and consolidation. In such a situation, stocks with higher valuations may get beaten up. Those investing in companies with high valuations may face difficulties. Overall, investors have faith in companies showing resilience during the pandemic. He believes that such companies will get good support in the market.
It’s time to invest safely
Overall, if you are investing in good mutual fund schemes based on your risk profile, then continue with your investments. Remember, this is the time for safe investments. Don’t be adventurous and try to earn returns.
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