Rate cut in line with expectations of bond market: Sanjay Shah, HSBC Global AMC

In an interview with ET Now, Sanjay Shah, Head-Fixed Income, HSBC Global Asset Management, shares his views on the credit policy. Excerpts:

ET Now: Whereas the credit policy has turned out to be no event for equity markets, for bond markets some degree of volatility has kicked in?

Sanjay Shah: Yes, in bond markets, the expectations have been fulfilled by a 25 bps cut, but the guidance is not as per expectations. The guidance really is saying that there is again little scope for further cuts and therefore RBI is willing to wait for looking at further cuts which is really affecting the bond market’s sentiment to some extent.

ET Now: Would you say that from a bond market’s perspective as well the credit policy has come in and gone and now one should focus on growth issues and commodity prices?

Sanjay Shah: Yes, commodity prices are obviously an important issue to look at. Growth issues, as RBI has stated, are taking a bit of backseat right now compared to the current account deficit issue that is a bigger risk to the economy. So the market will focus on those data going forward.