Rising crude oil prices have created a new challenge for the domestic market, making it more volatile every passing day. Most analysts on the street feel that it will be difficult for India to achieve the desired growth unless crude rates simmer down. In an interview with CNBC-TV18's Mitali Mukherjee, Alok Sama, president and founder of Baer Capital said that crude is going to be a key issue for the domestic market to deal with and higher crude prices will create a negative impact on India’s growth.
“Crude may head to USD 150 per barrel or USD 200 per barrel in next two years,” he added.
Talking about India’s performance as an emerging market, he said that India has been an underperformer for past few months as the market has moved towards a bottom end of the trading range, mainly because of mounting crude prices and inflation.
“The Nifty can be seen trading between 5000-6000 levels, while the Sensex will amble between levels of 17,000 to 20,000.” However, he also said that India may see solid performance going forward.
On the other hand, he also said that there is no point in getting carried away with the emerging markets and developing markets comparison issue. "There is no such thing as a generic developing market and you cannot put Japan and US in the same basket," he added.
Sharing his opinion on the RBI's latest interest rate policy, he said, "RBI is probably ahead of the curve and while the inflationary pressures won’t go away, they are mainly a function of higher commodity prices or higher crude prices in particular and it is not something that can be directly dealt with the RBI simply increasing rates."
Crude may head to $150-200/bbl in two years: Baer Cap
Tuesday, March 22, 2011
Yamunesh
