Ahead of TCS Q1 results, Morgan Stanley’s Jonathan Garner is bullish on stock

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Published: July 9, 2018 3:27:38 PM

Even as Tata Consultancy Services (TCS) prepares for its Q1 results on Tuesday, Jonathan Garner of Morgan Stanley is bullish on this IT stock.

Jonathan Garner of Morgan Stanley is bullish on this TCS stock.

Even as Tata Consultancy Services (TCS) prepares for its Q1 results on Tuesday, Jonathan Garner of Morgan Stanley is bullish on this IT stock. Morgan Stanley’s chief strategist of India and emerging markets advised investors on ET Now today to add TCS stock to the focus buy list. Furthermore, he upgraded health care  to overweight reducing beat further. He also said that macro risks are likely to remain unresolved in near term.

The shares of TCS plunged 1.27 percent to close the day at Rs1889 on BSE.

Meanwhile, as we continue to see major developments in the emerging markets, with a few of them facing high currency risks, Jonathan Garner of Morgan Stanley said a few days back that Asia EM equity strategists have been bearish on the markets.  Jonathan Garner, chief strategist for Asia and emerging markets at Morgan Stanley noted that there is similar downside for MSCI China and MSCI EM (emerging markets). In an interview to ET Now last month, Garner pointed out that he is overweight on India, but rising crude oil prices are a major risk. He also said that Morgan Stanley has raised Australia to equal-weight from underweight.

With respect to India, he said recently that considering that the crude oil prices may actually come back as a headwind in 2019, Morgan Stanley would be would be very cautious about strategically re-engaging here. Speaking about valuation in India, he noted, “India typically trades at a premium to other markets in Asia because it has high return on equity. That premium is at a fairly normal level. It is about 30% valuation premium to Asia overall.”

According to the expert, if oil prices go up it will be a drag on performance for Asian markets. “The tightening of policy in China and the US is still ongoing and then we had trade protectionism as an additional risk factor,” he said in a recent interview to the channel.

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