The Indian market valuation is not cheap by any stretch but it is still likely to see a decent rally over the next few months, according to Arvind Sanger of Geosphere.

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The global market analyst believes that India is one of the few places for international investors to hide with earnings risk much less than in every other part of the world.

Jahangir Aziz, Head of Emerging Markets Economics Research and Commodities at JP Morgan, meanwhile, believes that India does not provide enough compensation for macro risk and therefore, will put pressure on the currency.

“The amount of compensation that India is offering for foreign investors to come into India, given the macro risk is too little. And therefore, you will find pressures on the currency; not today, but the pressures on the currency continuing as long as India continues to have these high current account deficits and fiscal deficit,” he analysed.

In an interview with CNBC-TV18, Aziz and Sanger spoke at length about the near-term trajectory for the global capital markets and the impact the US CPI numbers will have on it.

The core consumer price index (CPI), which excludes food and energy, increased 0.3 percent from the prior month, US Labor Department data showed Thursday. Compared with a year earlier, the core measure decelerated from a four-decade high in September to 6.3 percent.

Also Read: US inflation slows more than expected, gives Fed breathing room

For the entire discussion, watch the accompanying video

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(Text input from Bloomberg)