August 3rd 2023.
Morgan Stanley, a brokerage firm, has upgraded India to overweight, making it a core market in the Asia Pacific Ex-Japan and Emerging Markets basket. This upgrade was due to the relative valuations being less extreme and India's reform and micro stability agenda which will support a strong capex and profit outlook.
The upgrade comes four months after Morgan Stanley upgraded India to equal weight from underweight, citing a narrowing valuation premium and a resilient economy. The strategists expect the Sensex to reach 68,500 points by December and for the market index to trade at a trailing price-to-earnings multiple of 20.5 times, slightly higher than the 25 year average of 20 times.
Morgan Stanley strategists believe India is at the start of a long wave boom, but they also feel that China may be close to ending one. They have downgraded their rating on Chinese stocks, asking investors to capitalize on the rally led by packages announced by the government. This could be the beginning of a new era of Indian outperformance in comparison to China.
In addition, Morgan Stanley also downgraded Taiwan to equal weight, citing stretched valuations amid a rally in tech stocks.
India's manufacturing sector activity eased for the second month in a row in July, at 57.7. This activity is expected to remain weak in the near-term on account of the coronavirus pandemic.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
