We#39;re in a bear market globally post-correction in larger stocks, says Adrian Mowat

Market Outlook
Adrian Mowat

Adrian Mowat

“I believe crude prices have peaked at around $ 130 a barrel. The Russia-Ukraine crisis is becoming less dominant now, and focus will move to the Federal Reserve,” emerging equity markets strategist Adrian Mowat said in an interview to CNBC-TV18.

Crude oil prices rose steadily following Russia’s invasion of Ukraine and crossed $ 130 a barrel in the international markets for the first time since 2008 amid supply worries, especially after the US and its allies imposed sanctions on Moscow including the ban on buying Russian oil by the US.

But prices later cooled down to $ 115 a barrel amid hopes that OPEC countries may increase supply to fill the gap created by the oil ban imposed on Russia.

The Russia-Ukraine conflict is into its third week. Global markets had crashed on February 24, the day Russian forces started began military operations.

In the wake of the sanctions imposed on Russia, experts had begun raising concerns over global growth and inflation.

“We are into a bear market globally, post-correction in larger stocks. The risk of slow economic growth has increased,” said Mowat.

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Globally, markets had seen a double-digit fall with some indices, including the Nasdaq and the Hang Seng, correcting more than 20 percent from their peaks. Generally, a fall of more than 20 percent is considered as entering a bear market territory.

In India, 60-70 percent stocks in the BSE500 saw double-digit corrections from their peaks and the Nifty plunged nearly 16 percent from its all-time high.

However, the markets rebounded sharply from recent lows, gaining 4.6 percent in three straight sessions till March 10 after four falling for four consecutive sessions, cutting down the losses to nearly 11 percent from 16 percent earlier, while internationally, the Dow Jones, S&P 500, Shanghai Composite and Nikkei have so far gained 1-4 percent from recent lows.

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“Indian equities remain quite resilient,” said Mowat. He said there is still more upside in energy stocks and expects financials to do well. “Weakness in Indian financials is overdone,” he said.

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