The markets need to get over the fear of how quickly the US Federal Reserve could raise interest rates, said Manpreet Gill of Standard Chartered Private Bank, on Monday, adding that his firm prefers largecaps at the moment as they offer a margin of safety.

In an interview to CNBC-TV18, Gill said, “Once market get over their fear of how quickly the Fed could raise rates and we realize we are looking at 25 bps this year, perhaps no more rate hikes than what has already priced in; we think that might start taking some of the pressure but we need to get beyond that Fed meeting in March for markets to feel more comfortable.”

Talking about geopolitics, he said it historically has had a short-lived impact on the equity markets. However, he is waiting to see if the current geopolitical risks are protracted. “We are trying to gauge for, as we go through the crisis, whether this, like many other geopolitical events recently, is another one that has a short-lived impact on the market or whether there is a risk that could be more protracted and oil is the key one to focus,” Gill said.

Also Read: Dollar might appreciate further; inflation in India could inch up: Standard Chartered

“But unless we go down that sort of worst-case scenario, we do think the market will look through it in a month or two time and we will be back to focusing on growth and Fed, which we think ultimately good for equity markets. So hedge, we think is one good way to think about the geopolitical risk at this point in time,” said Gill.

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