How investing in big tech tech stocks can counter market volatility

How investing in big tech tech stocks can counter market volatility

In recent weeks, the inflation risk has become a new apprehension among equity investors, and understandably so. With the increasingly volatile global economic landscape, investing dynamics have been shifting at an unnerving pace, with little left to predictability. Rising prices have raised concerns around the risk of inflation running higher than target levels, driving rates higher and prompting central bank intervention. Over the past year, governments across the world have announced stimulus packages and economic relief measures to combat the prolonged economic lull induced by Covid-19. The result has been a build-up of savings among consumers, and a consequent rise in the prices of goods and commodities as economies reopen. In the US, for instance, inflation hit 2.6 per cent in the 12 months preceding March 2021, breaching the 2 per cent Fed target. Many other major economies have also been witnessing similar risks, and concerns over the impact of an unforeseen surge in inflation on equity markets have led to steep declines across major global equity indices. Investors are spot-on in questioning the rising risk of inflation in the coming months or quarters, but there are mixed views on its impact on the broader capital markets, especially growth stocks.