NEW DELHI: Global stocks are tumbling as bond markets in the US are flashing an inverted yield curve , considered harbinger of a looming recession.While the possibility of a recession in the US is worrisome for the global economy, economists and analysts say Indian stock investors need not worry much. The fear could mean just a surge in rate cut hopes, till further clarity emerges on the health of US economy.An inverted yield curve is formed when the yield of long-term debt instruments falls below those of short-term debt instruments of same credit quality. In the past, such a curve has been seen in the US ahead of every recession.Historically, an inverted yield curve has signalled an upcoming recession.“Recessions usually begin six to 18 months after an inversion, and the stock market can continue to rally well after the yield curve starts flashing red. The 3s-10s curve, as it is known, inverted on July 17, 2006, yet the US market continued to rally for nearly 15 months before topping out on October 9, 2007. The S&P500 index gave 29 per cent return during that period. India investors need not worry about this,” said VK Sharma, Head of PCG & Capital Market Strategy at HDFC SecuritiesOn Friday, US 10-year treasury yields traded 1.9 basis points below the three-month rates, as yields inverted for the first time since 2007.Yogesh Mehta, Vice-President, Motilal Oswal Securities, said probably the US Fed ’s more dovish stance last week suggested the policymakers are looking forward to cutting rates and that’s why the 10-year bond yield has corrected from the recent highs.“In India, the macros are favourable, with inflation lower and GDP projected to grow at 6.8 per cent. That provides a chance for RBI to cut policy rate in April policy,” he said.The BSE Sensex slipped some 380 points Monday morning and was still down 370 points at the time of writing of this report. NSE barometer Nifty has slipped below the 11,350 mark.Edelweiss Professional Investment Research in a note said US’ quantitative tightening last year might have artificially delayed inversion, and that a recession may be close.“Whenever the unemployment rate breaches the 12-month moving average level, recession is quick to follow. That level has been breached at current level. A slowdown with the possibility of a full-blown recession is imminent in the US in the near future,” Edelweiss said.BofA-ML’s survey among fund managers in March shows that a net 25 per cent of money managers expect the global economy to weaken over the next 12 months. This, the brokerage said, was consistent with 2000-01 and 2008-09 recessions. But a lot depends on US economic data and how US policymakers react to any such threat.Analysts say this has to be seen in two contexts from an Indian perspective.If it is really a global slowdown, expect no significant jump in commodity prices. This increases the probability of policy easing in India, said Vivek Rajpal, Nomura India.“Since Fed is dovish and US real yields are moving lower, they give an extra cushion to RBI to maintain real yield differentials despite cutting rates. What we are seeing here is increased probability of more rate cuts. A case for 50 bps is not clear, but a 25 bps rate cut is more likely,” he said.Rajpal said the degree of flattening (of the yield curve) is higher this time around than probably what had been seen in the previous cycles as it is now quite a divergent world.The US economy is clearly showing signs of slowdown. But that may not mean a recession. Fitch Ratings last week cut global growth forecast aggressively, but said it sees no signs of the onset of a global recession “The US economy is still growing above trend; unemployment rate has been low and household income growth has been solid to support consumer spending. Plus, fiscal policy is being eased. Some of the recent eurozone weakness reflects temporary factors that should soon start to abate,” it said.Data showed US economic growth fell to 2.6 per cent in December quarter from 3.4 per cent in September quarter. Fitch said the slowdown was most pronounced in trade and manufacturing indicators, and in residential investment, and the latter is linked to the earlier increases in long-term interest rates in 2018.In addition, surveys have indicated that US companies continued to plan to increase investment in 2019 despite a rise in global uncertainties.Sharma of HDFC Securities said unless the yield curve inverts in the 2-10 year bonds, and stays so for a month, we can’t say a recession is imminent."We may have to wait a little more to see US’ March GDP data. In the past, such a situation was seen in 2011-12 too, but subsequently it did not lead to a recession. We have to see how policymakers assess the situation," said Sunil Kumar Sinha, Principal Economist at India Ratings."The US Fed expects no rate hike in 2019. It is now busy sucking liquidity to the extent of $ 50 billion a month. The ECB, which had stopped providing stimulus in September last year, has begun it again. The Bank of Japan continued to provide liquidity. Since banks have swung into action much before recession, there is unlikely to be one in the near future," Sharma said.