India remains preferred market for investors: JP Morgan

Adrian Mowat, JP Morgan says MSCI EM is up 12 percent from its 2015 low but it is still 20 percent below its 2015 high. Investors are asking if they should buy the bounce.

In a survey at brokerage's Emerging Markets Credit and Equity conference, EM equities received most votes for best performing asset class in 2016, says Mowat, adding India remains the preferred market.

There was much delight with the RBI's 50 bps repo rate cut, he says, adding the hope is that this is the start of a more sustained monetary stimulus.

Sakthi Siva, Credit Suisse says with the 12 percent rally in MSCI Asia ex-Japan, the P/B has now risen to 1.42x which is 15 percent above the 2008-09 lows. "While we could see profit-taking, we believe this rally has more to go," he adds.

As with cyclicals, he believes first phase of MSCI Asia ex-Japan rally was driven by trough valuations but that second phase could potentially be driven by return on equity (RoE) bottoming/slowing EPS downgrades.

He says countries associated with the best EPS revisions so far in October are Taiwan and MSCI China. Siva highlights that India has the biggest downgrades in the region this month.