Fed taper, higher interest rates to weigh on market returns in Samvat 2078

Macro headwinds, such as high global crude oil prices, supply-chain disruptions escalating tensions between US and China, are likely to keep global and local markets volatile

After a year of eye-popping returns, gains for the benchmark indices in Samvat 2078 may be relatively muted, given the rich valuations and the imminent taper of the US Federal Reserve’s bond-buying programme, which may impact portfolio flows into emerging markets (EMs), such as India.

Macro headwinds, such as high global crude oil prices, supply-chain disruptions, inflationary pressures, the possibility of hardening interest rates across the globe, internal economic challenges in China and its global ramifications, and escalating tensions between the US and China, are likely to keep global and local markets volatile, revealed analysts.

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