Investing.com – The equity market rally continued in the first quarter despite a more hawkish interest rate outlook, but it is now faltering, according to HSBC, adopting a more defensive stance with its sector weightings.
Equity markets, it seems, are only just beginning to take note of the fact that the outlook for interest rate cuts has changed substantially from that at the start of the year, analysts at the U.K.-based bank said, in a note dated April 26.
“When we adopted a more defensive stance with our sector weightings earlier this year … our rationale was that market expectations for policy interest rate cuts were too optimistic and this would be negative for equity markets. It has taken longer than expected for signs of the latter,” the bank said.
Investors have to navigate two potentially opposing forces, the analysts said. On the one hand there is a realistic prospect…
