Sakthi Siva, Credit Suisse says MSCI India has underperformed MSCI Asia ex-Japan by 7.6 percent since the highs on August 21.
According to her, India has always underperformed MSCI Asia ex-Japan when its premium reaches 50 percent as it did in March 2006, December 2007, January 2015 and again in August 2015.
Siva says India's 2015 consensus EPS downgrades of 17 percent are double the region's. "India's current ROE is 13.8 percent but implied ROE is 19.1 percent, we reiterate underweight call on India," she adds.
On FOMC meet outcome, Chris Wood of CLSA says the consensus remains committed to its normalisation narrative is clear from the reaction to Wednesday's Federal Reserve statement which has been interpreted as putting a December rate hike back in play.
Greed & Fear remains unconvinced, though it is not surprising that the Fed is now less concerned about international developments than at the September meeting because markets have subsequently rallied, he says, adding remember the Fed follows the markets & not the other way round.
"Still the Fed's problem now is that the Dollar has begun to rally again with the US Dollar index having risen by 3.7 percent from its recent low reached on October 14," Wood says.
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