India may see more de-rating if growth expectations reduce: Saion Mukherjee

Rising interest rates will have a negative impact on equity markets, as this is being driven by inflationary pressures, higher deficit and not so much from growth, says Mukherjee

The sharp rebound in the markets is being fuelled by strong domestic liquidity and expectations of strong earnings growth, says Saion Mukherjee, managing director and head of equity research, India, Nomura. In an interview to Samie Modak, he says India’s valuation premium to other emerging markets (EMs) will reduce as liquidity conditions tighten. Edited excerpts:

How do you see rising bond yields impacting the equity market?

Rising interest rates will have a negative impact on equity markets, as this is being driven by inflationary pressures, higher deficit and not so much from growth. The tightening of liquidity and rates are more of