“Recent opinion polls suggest that the BJP-led NDA alliance is gaining momentum and is poised to get quite close to the ‘magic number’ of 272, which we believe is the outcome most favoured by the equity markets,” it noted.
It increased its weight on India through Tata Motors, ITC Ltd, HDFC Bank and ICICI Bank. The brokerage reckoned that the actions of policy markets since September 2013 have helped the Indian currency regain investor credibility while tight curb on gold imports coupled with improved merchandise and
service exports sharply reduced the current account deficit.
It also acknowledged an improvement in India's earnings environment with BSE Sensex consensus earnings estimates witnessing 2-3% upgrade in the last few months. BNP currently sees benchmark Sensex EPS (earnings per share) for the fiscal 2015 at Rs 1554 compared to Rs 1478 at the end of September 2013.
Although it upgraded India and Indonesia citing improved growth prospects and lower currency risks, it BNP downgraded China and Korea to underweight and overweight respectively due to increased risk of slowdown and increased earnings risk, in that order.