Moneycontrol Bureau
Brokerage firm Credit Suisse has maintained its 10 percent overweight stance on India, buoyed by economic recovery and a significant fall in inflation.
Credit Suisse believes Prime Minister Narendra Modi's structural economic reform programme is already bearing fruit and India merits an exclusion from the 'fragile five.'
Some concerns notwithstanding, the brokerage says it prefers India over Brazil in the emerging markets (EMs) space.
"Our MSCI India regression model suggests the greatest potential upside in global emerging markets (GEM)," says the report,
However the report added that the negative top and bottom line revisions is making the firm nervous about maintaining the 'overweight' call.
Excerpts:
- Negative top and bottom line revisions are eroding the attractive growth outlook - Valuations appear stretched versus GEM although less so against global equities
- Indian equities appear to be pricing in aggressively loose monetary policy
- Technical indicators remain elevated for India but not as overbought as July 2014
(Written by Ritika Dange)
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