Indian markets are "well adjusted" to deal with the US Federal Reserve's rate hike and too much volatility is unlikely here in the next couple of months, BSE chief Ashishkumar Chauhan said today.
For the first time since 2006, the Federal Reserve last night decided to hike the rate by 25 basis points after keeping them at near zero levels for a prolonged period.
While the move was widely expected and imminent, there were concerns that Fed hiking interest rate could result in increased outflow of foreign funds from emerging markets like India.
"It (rate hike by Fed) has been long time coming and people have sort of planned for it. Probably we (international markets) are over adjusted for the hike," Chauhan told PTI here on the sidelines of an event.
Indian markets actually rose sharply in afternoon trade today and the benchmark BSE Sensex index was up more than 325 points, which analysts attributed to the markets having already factored in the Fed hike.
Chauhan said it looks like the Fed would hike rates slowly over a long period and what remains to be seen is how those hikes carry out and how the carry trades kind of get unwound in that case.
"Otherwise, India is well adjusted (to deal with impact of Fed rate hike) and has fortified its position over the recent years," Chauhan said.
When asked whether there would be volatility in the markets in the short term, he said it would not be too much.
"Currently I don't see too much volatility in the next couple of months or the kind of volatility which was expected earlier," Chauhan said.
