According to CNBC TV18, Prashant Paroda, Portfolio Manager, Emerging Markets at Allspring Global Investments, believes uncertainty around the Strait of Hormuz is likely to keep global and Indian equity markets under pressure until there is progress in Iran-US negotiations. As reported by CNBC TV18, Paroda stated that 'So, I believe it's just a question of who'll blink first, but till then, the markets will be kind of range-bound, and oil will continue to rise until we find any sort of breakthrough in Iran-US talks.' He noted that both sides, whether it's Iran or the US, neither side is blinking, and if Iran thought that just because the US midterms are coming, it would lead to a solution, it doesn't look like the US is too worried about the midterms at present.
As reported by CNBC TV18, Paroda sees oil prices continuing to rise due to the current situation. He cited a quote by the Qatar minister saying that unless we open or get into some sort of solution, this could be a big issue for economies in a couple of months. According to the report, diesel prices in the US are now closer to $6, which is starting to pinch consumers, with gas prices also going higher. However, the US is ready to take some of the pain with the hope that Iran will come back to the table.
According to CNBC TV18, Paroda expects the US Federal Reserve to postpone any interest rate hikes until after the US elections due to political sensitivity surrounding such a decision. As reported, 'It might become a political decision for the Fed, and they might decide to punt it till after the elections.' He noted that 'So, we'll see whether rate hikes will happen. But I believe it will be quite sensitive to do it right before the elections.'
As reported by CNBC TV18, Indian markets have been in a bit of a downdraft, and yesterday, made a fresh lower low, breaching the 23,800 mark. Paroda noted that 'If there is no clarity on the situation, it would sort of impact the turnout and how the votes go' for the upcoming US elections in November. He emphasized that 'For now, the US is ready to take some of the pain with the hope that Iran will come back to the table'.
