Rate hikes make equities riskier

Oct 07 2013, 10:04 IST
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SummaryMarkets have been fickle in recent weeks, even risk-aware investors will have to be cautious about the stocks they pick

besides interest rates which determine the outcome of the economy and hopefully a favourable interplay of these forces will give us cause to cheer in future though I suspect that a strengthening US dollar in this quarter will take some of our options off the table. It is also fair to say that just because tapering of quantitative easing in the US is imminent, it does not automatically follow that interest rates will also increase. But if they do then we could well be looking at a completely different set of issues to deal with and the current RBI move may suddenly seem benign in retrospect.

The author is president—retail distribution, Religare Securities Limited

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