Deutsche Bank cuts Indian stocks to 'neutral' relative to other emerging mkts

Tags: Stock Market
Deutsche Bank downgrades Indian stocks to "neutral" from "neutral/overweight" relative to other global emerging markets, saying valuations, after a sharp rally on Bharatiya Janata Party's (BJP) decisive election win, appear "very stretched" against lower GDP growth.

The Nifty has risen 24.4 percent since Sept. 13 when Narendra Modi was declared as BJP's prime ministerial candidate, with overseas funds pumping over $14 billion in the cash shares over that period.

"We acknowledge that there is the potential for massive long-term upside, but we suspect that there needs to be further economic pain before the agenda for more fundamental reform to governance practices becomes clearer," Deutsche said in a report on Thursday.

Deutsche says Mexico and China have also witnessed similar selloff in the past as reform euphoria in both markets waned, while Modi's comparison with Margaret Thatcher raises short to medium term risks.

The investment bank says it still prefers India to the other BRICs, but advises non-emerging market investors to wait for a better buying opportunity.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India’s festivals teach us to share our wealth and joy

    India is an aporia in its own true sense.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Zehra Naqvi

How smells evoke strong memories

Remember that time when a passing fragrance transported you to ...

Dharmendra Khandal

Indian zoos need a fresh approach

Recently, when a man jumped in a tiger trench of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture