JP Morgan had said that it is time to sell India and move that money to China and some other markets.
Adrian Mowat of JP Morgan comments on the Indian markets. He states that India has a problem of overheating. He says that inflation is above 6% and it is a very politically sensitive topic in a large democracy where people have relatively low disposable income.
According to him, the Ministry of Finance which until a couple of months ago was concerned about growth, is now worrying about price stability.
"The RBI has been worried about price stability for a while and has been tightening policy. They have continued do that and the cost of borrowing in India - whether you are borrowing for a Mortgage or to put up new plants of machinery, is going up sharply. Ultimately, one will see less topline growth and see a bigger impact on net interest margins as slower topline growth gets combined with higher financing cost," states Mowat.
J P Morgan expect earnings to be downgraded towards the end of this year, justifying the underperformance of the market which they feel will continue.
Adrian Mowat 
