Will war on inflation hamper growth?

With interest rates soaring, where are markets headed? Experts give their take on the impact of rate hike on markets.

According to Vallabh Bhansali, Chairman, Enam, "The interest rate rise was a good thing, not bad. We are in a good situation, it is good for companies, which are prudent, which have their focus right, I don't see things change for them at all. All factors are a constant in a market, if not ‘x’ there is always ‘y’ to pick about. We have had a bull market for several years and the market over the last 18 years has been correcting itself from time to time, fundamentally, we are very sound."

Mihir Doshi, Country Head-India, Credit Suisse expects earnings to take a hit in the near future. "On one hand, there is need for growth but on the flip side, rates are moving higher. Our expectation would be that earnings will take a hit in the near future, in the next 6 months but the longer-term story remains strong so if one looks beyond 2008, I don’t see a problem."

Hemendra Kothari, Chairman, DSPML says, "Of course, the interest rate going up is a definite concern to a marginal cost, and to some extent, it was overheating, which RBI also controlled. There is a lot of money available from outside wanting to come in and is looking at valuations - if the market comes down, they are all waiting to come in. So the long-term growth story remains."