China markets on an upswing, India GDP number looks distorted on the upside: Shane Oliver, AMP Capital

In an interview with ET Now, Shane Oliver, Head of Investment Strategy & Chief Economist, AMP Capital, shares his views on markets. Excerpts:

ET Now: Does it seem like after today’s move, the selling could be done with and the markets may have bottomed out in the near term?

Shane Oliver: Yes. If you look at the China’s share market, it has had a few corrections in the last few pullbacks but the markets are in the top swing. It is in the natural bull market to see relatively steady advances persuaded by casual sharp correction as those investors who have gotten along with their profits usually in response to some rumour or piece of news, and that is exactly what we saw last week. But the broad picture in China is still up and I certainly do not see monetary tightening any time soon in China. There is more easing ahead but nobody says it is the end of bull market.

ET Now: The global picture looking okay but all eyes on India for a number of things. One, the GDP numbers that came out over the weekend, two, the Reserve Bank of India meets tomorrow for credit policy. What do you believe is happening in India right now, and what could be the way ahead in terms of the Reserve Bank’s actions?

Shane Oliver: I think the growth numbers were overstated in India. 7.5% looks fantastic but if you look at the growth value add numbers, growth actually slowed from 6.8% to 6.1% and the GDP numbers look distorted on the upside. The underlying picture is one of softening growth. In the meantime, inflation is running in line with the RBI’s objective and I think it should cut rates when it meets tomorrow.

ET Now: Given the way how some of the commodity-dominated markets like Russia and Brazil have made a comeback, do you think this big commodity scare is now behind us, that was the top story I guess for 2015 that commodity prices will plunge?

Shane Oliver: Well, that is a good question, particularly for someone living in Australia. As commodity prices come down, it is no good for a country like Australia. I think the broad picture in commodity prices is still down. I found it hard to get overly excited about Australian share market or Australian dollar. I think the broad trend in the Australian dollar is still down, its commodity story over the decade continues to unwind on the downside.