(Adds additional El-Erian comments)
NEW YORK, Aug 24 (Reuters) - Mohamed El-Erian, chief economic adviser at Allianz SE, said Monday that turmoil in stock markets was creating opportunities for investors, but could prevent the Federal Reserve from hiking interest rates next month.
El-Erian also said that equity markets could move “a lot lower” since central bank policies had inflated share prices “well beyond fundamentals.”
“This is a good time for investors. This is an easier time, ironically, than it has been for the last few months because value is being created,” El-Erian told cable television network CNBC. He added that “it’s going to be very hard for the Fed to move in September.”
“We are still well above what would be warranted by fundamentals,” El-Erian said, citing an “enormous faith in central banks” combined with a lack of economic growth.
He said shares could extend their current plunge before rebounding since “you’ve got to overshoot the fundamentals on the downside to induce people back in.”
China shares sank nearly 9 percent Monday, while the dollar and major commodities dropped sharply. Europe’s FTSEurofirst 300 of top regional shares was last down 6.2 percent, and the Dow Jones industrial average and the S&P 500 last down over 4 percent. (Reporting by Sam Forgione; Editing by Chizu Nomiyama and Meredith Mazzilli)