Why won't Nomura upgrade emerging markets despite recovery?

Once considered as the hottest investor play, emerging markets have been combating inflationary pressures and high commodity prices, which resulted in erosion of funds. Despite the worries, the emerging markets have managed to recover. However, Ian Scott, Chief Global and European Strategist of Nomura feel that it is not time to upgrade emerging markets yet .

In an interview to CNBC-TV18, Scott says that emerging markets are seeing strong recovery but it is more of short covering rally than bullish trend. He is concerned that the rally has not been a fundamentally driven one and rising oil and commodity prices are still not good for emerging markets. Developed market stocks have underperformed, rising about 7% since March 17, although they remain the better bet for the year to date, up more than 5%. Scott says,