According to the global financial services major, it has been among the better performing currencies in the emerging markets and has appreciated 6 per cent so far this year, but there are few triggers left for a sharp rally of the rupee from its current level.
They also said that the recent strengthening in the euro made them more cautious on U.S.-exposed stocks but more positive on domestically exposed companies.
In an interview to CNBC-TV18, Geoffrey Dennis, Head of Global Emerging Market Strategy at UBS & Richard Harris, Chief Executive at Port Shelter Investment Management shared their views and outlook on global markets and geopolitical tensions.
Market is in a modest consolidation phase, but I do not expect a major correction, said Geoffrey Dennis, Head-Global Emerging Market Strategy at UBS in an interview to CNBC-TV18.
"Despite rapidly falling battery costs, we expect a long- range electric vehicle (EV) to remain too expensive for mainstream adoption without major government subsidies," UBS said in a research note.
The central government's fiscal deficit has already reached 81 per cent of the full-year target in the first quarter (April to June) of 2017-18. "Accordingly, the cumulative fiscal deficit reached 2.6 per cent of GDP FYTD.
In an interview to CNBC-TV18, Geoff Dennis of UBS spoke about India and other emerging markets.
Despite a bumper crop in the rabi season, farmers in many states are in distress because of sharp fall in prices in both domestic and global market.
According to the UBS Evidence Lab USA C-Suite survey within emerging Asia, China is the preferred economy, as 40 per cent of larger companies surveyed expressed a likelihood of incremental investment over the next year, while over a quarter of larger companies expressed an intention to invest in India.
Unfortunately, however, the valuation expansion in India has taken the country back to looking less attractive, UBS said.
The report has attributed the possible rise in inflation to eight factors including pent-up consumption demand on remonetisation, a rise in rural wages, an increase in minimum support prices (MSPs) for agricultural crops and movement in global commodity prices and rising input costs.
Softbank Group and Saudi Arabia's main sovereign wealth fund have committed to invest over USD 93 billion in technology sectors such as artificial intelligence and robotics
According to the global financial services major, notwithstanding the "gradual pace" of recovery on the ground, the government's current measures are steps in the right direction.
As geopolitical tensions rise around the world, from Syria to North Korea - a veteran market expert Geoff Dennis of UBS shared his outlook on how to trade hereon.
Spot gold rose 0.1 percent to $1,256 per ounce by 0100 GMT. U.S. gold futures climbed as much as 1 percent to $1,260.80 and was last up 0.7 percent at $1,257.
The global brokerage firm believes that the flows could drive markets up in the near-term but has retained the year end Nifty target at 8,800.
A number of foreign investors including HSBC and UBS have stopped issuing controversy-ridden P-Notes as regulatory and enforcement agencies step up their clampdown on misuse of this once-popular instrument among foreigners to invest in Indian markets.
Britain's Vodafone Group said last month it was in talks to merge its Indian subsidiary with Idea Cellular in an all-share deal. The merger will create India's largest mobile operator with about USD 12 billion in sales.
With its flagship wealth management division struggling amid record-low interest rates and a preference among billionaire and millionaire clients for holding cash, 2016 net profit fell to 3.3 billion Swiss francs (USD 3.3 billion) from 6.2 billion in 2015.
That would be a dramatic reversal from last year, when assets under management for bond funds surged 142 percent to 1.93 trillion yuan (USD280 billion), while equity and balanced fund assets dropped 17 percent to 1.99 trillion yuan, according to data from Chinese consultancy Z-Ben Advisors.
The global financial services major said that its Global Emerging Markets (GEM) strategist remain 'overweight' on India, while its Asia Pacific (APAC) strategist has 'neutral' stance.
Companies raised USD 648.9 billion in equity during 2016, against USD 873 billion last year, Thomson Reuters Equity Capital Markets (ECM) data up to Dec. 28 showed.
UBS has retained a buy call on Coromandel International with a target price of Rs 325 as it believes the stock is attractively valued at FY18 PE of 14x.
Kotak's preferred picks are ITC, Britannia Industries, Colgate Palmolive, GSK Consumer and Bajaj Corp.
UBS believes this underscores management's strong due diligence and its strong operational improvement and integration capabilities. It also believes that the global auto component space still offers opportunities for disciplined companies like Motherson Sumi to create further value through mergers & acquisitions.