In an interview with ET Now, Christian Nolting, Lead Strategist, Asia Pacific & Regional Head of Portfolio Management, Deutsche Bank Private Wealth Management, talks about global markets, Asian equities and India. Excerpts: We have had time to digest the results of the stress tests in Europe and of course, markets have been rather range bound in reaction to the stress tests. But going forward, how do you think global markets as well as emerging markets here in Asia are going to respond to the worsening global macro backdrop? What we really see is we have to digest this that growth from now on for the second half of 2010 will probably decrease from the high levels as we have seen before. So we get some growth numbers today in the US, for example, which should not be too bad actually, but maybe lower than we have seen in the first half and actually, that is what you can see in equity markets as well. So investors are really cautious. There is discussion on a double dip or is just mid-cycle correction. So it is rather mid-cycle correction because the growth is still there. You should not say thing of growth just going down is another recession. It is quite normal that we see growth coming down. Many stimulus packages like in the US are petering out. So if you look at the company site, bring you back to the equity market, it is rather looking good which is now also stated in the earnings season. So actually we do not go for double dip and that is why we think the markets will come down. Probably we have seen something in the last weeks and if you look at companies, it is really looking much much better than, for example, in the second half of 2008. Let me ask you a question which is of direct relevance for India. The Sensex or the Nifty is perhaps the only third major or emerging market index in the world that has actually had two straight back to back gains in the past couple of months, including the month that ends today. The other two are Hong Kong and Germany. What do you think explains the outperformance of Indian equities? It is not only India, it is different countries where you see outperformance. Actually these are those countries which are seen as much more stable if there would be a downtrend. So for example if you look at India, the economy is much more domestic than not so exposed globally, exposed like China for example. You see the big performance difference between China and India. If you look at other countries, Germany for example, the outperformance is simply there because really the euro crisis, a weaker euro as we have seen really favours German exporters. So they make a lot of gains with that weaker currency. So we have to wait to differentiate, but what we can see is it is coming from the discussions of a double dip and then these countries who are profiting from the environment, be it having a much more domestic economy or be it just weaker currencies as a result of European crisis. Then you also see the outperformance which from my point of view is a very good sign that you cannot compare the markets to 2008 where everyone was selling. So it is really differentiating from investors and looking really into the different markets and clearly India really has some potential of course to grow from here. Growth is relatively high but inflation as well. So people are little worried about this one but overall, the outlook is quite positive.

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