JP Morgan’s ‘Overweight’ Upgrade: A Green Light for Investors in Stock Market India?

JP Morgan's 'Overweight' Upgrade: A Green Light for Investors in Stock Market India?

It’s a great time to be an Indian investor as the opportunities seem to be flowing in Stock Market India. The indian Indices for the first time in history crossed the INR 20000 mark and crossed expectations after the historic G20 summit. 

Adding to the pleasure of the glory that India has witnessed this year, JP Morgan has upgraded India from a Neutral position to overweight. 

So let’s dive into the analysis

JP Morgan’s Views on Stock Market India:

Since the 4,800 drop in Sensex after reaching an all-time high in the middle of September, JP Morgan, the global brokerage firm, has said some positive things about the stock market India. 

JP Morgan has upgraded Indian equities to overweight from neutral stating that investors can use any near-time dips as opportunities to buy. In addition with the election year closing in for India, there are going to be ‘sparks flying’ in stock market India. 

JP Morgan, the global brokerage firm added that India offers one of the strongest emerging market nominal GDPs which compounds certain demographic trends in infrastructure investment needs and also possesses competitive risk-adjusted returns for developed market equities. it further explained that a deeper domestic bond market should support lower risk premia. 

Model Portfolios Suggested by JP Morgan:

JP Morgan has suggested a few model portfolios in Stock Market India

JP Morgan has further gone forward and added Sun Pharmaceuticals , Bank of Baroda and Hindustan Unilever Ltd to its list of stocks in the EM Model Portfolio. 

However, even though concerns relating to investors seeing a high probability of high interest rates staying for quite a long period, FIIS pulling out monetary funds from Dala Street and even domestic investors pouring in funds, the outlook is positive. 

Will the bonds market be a contributory factor in Stock Market India’s shift?

JP Morgan also aids that a deeper bond market is also going to support a lower risk premia as they had added Indian bonds in JP Morgan’s index Suite. This index contains a variety of asset classes ranging from emerging markets to development market bond indices. Due to this, Jo Morgan said that India has quite a competitive risk-adjusted return to developed market equities. 

Earlier this month, Morgan Stanley, another global brokerage firm increased its overweight stance on Indian equities stating that the relative growth of the market is improving and the macro stability setup looks quite sufficient to withstand the higher real rate environment. 

Global brokerage firms on Stock Market India’s position:

Morgan Stanley, in a report, said ” The dream run for domestic flows continues and multipolar world dynamics are driving both the FDI and portfolio flows towards the Indian subcontinent. The recent high-frequency trends also support the bullish stand with inflation concern abating and trade balance improving”

Similarly, a few weeks back the CLSA had upgraded India to increase Indian portfolio allocation to 20% above the MSCI benchmark. Nomura also had upgraded the Indian equity market to overweight status stating that the valuations might remain expensive. 

Going down the road a few months back, Goldman Sachs had also issued a report stating that India is overweight now given the medium-term growth prospects and had recommended foreign investors to build exposure in the emerging market. 

Looks like things are turning out for the better for Stock Market India and investors as well as traders will have to keep their eyes wide open for lucrative opportunities. 

We’ll be back with more interesting news soon.

Until then, Happy Trading!!

Commodity Samachar
Learn and Trade with Ease

Also Read: JP Morgan to Introduce Indian Government Bonds Globally, Commodity Market News | Will US Data dominate today’s market and steal the spotlight? 

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