Inflation Remains India’s Biggest Concern, Aegon’s Ghosh Says

Saibal Ghosh, chief investment officer at Aegon Religare Life Insurance Co., comments on the outlook for Indian equities. Ghosh spoke in a phone interview from Mumbai today.

The Bombay Stock Exchange Sensitive Index, or Sensex, fell 103.97, or 0.6 percent, to 18,028.27 at 1:02 p.m. in Mumbai.

The Reserve Bank of India increased the repurchase rate to 7.50 percent from 7.25 percent, according to an e-mailed statement today. Nineteen of 20 economists in a Bloomberg News survey predicted the decision, while one expected no change.

On interest rates:

“The rate hike is expected but more importantly is that uncertainty in policy still remains high as inflation is the biggest concern. We can see further rate hikes unless we see global commodity and energy prices moderate significantly from current levels.”

Advice to investors:

“The long term looks good. So if some investors are already invested then they should stay invested but if some are planning to put money in now, they should wait because the market will definitely not go anywhere in a big way in the next one to two months.”

Ghosh recommends fast-moving consumer goods and pharmaceutical stocks and advises against banking and real- estate shares.

To contact the reporter on this story: Hemal Savai in Mumbai at at hsavai@bloomberg.net

To contact the editor responsible for this story: David Merritt at at dmerritt1@bloomberg.net

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