NEW DELHI: Maintaining a bullish stance on the Indian markets, Adrian Mowat, Chief Asian Emerging Market and Asia Equity Strategist at JP Morgan told ET Now that he expects the twin problems of current account deficit (CAD) and fiscal deficit being dealt with as the two will narrow in the coming year.
Mowat feels that a reduction in diesel subsidy will help India improve its fiscal gap. According to Mowat the Reserve Bank of India will be able to cut interest rates if CAD and fiscal deficit come down in FY14.
"India does offer credible reasons for itseconomy to recover," Mowat said. While he has a cautious view on emerging markets, Mowat said that transparency in decision making in India will improve market sentiment.
In the backdrop of weak economic growth, Mowat expects a tough Q4 earnings season for Indian companies. He is however, bullish on IT stocks on the back of improvement in discretionary spending.