Morgan Stanley upgrades Indian equities to ‘overweight’, 5 reasons why

By: |
New Delhi | May 25, 2016 12:59 PM

The BSE Sensex surged over 400 points in the afternoon trade on Wednesday, while NSE Nifty surpassed 7,850 mark on sustained buying by funds and retail investors amid firm overseas cues.

bse sensex nse nifty indian markets morgan stanleyThe BSE Sensex surged over 400 points in the afternoon trade on Wednesday, while NSE Nifty surpassed 7,850 mark on sustained buying by funds and retail investors amid firm overseas cues.(Reuters)

The BSE Sensex surged over 400 points in the afternoon trade on Wednesday, while NSE Nifty surpassed 7,850 mark on sustained buying by funds and retail investors amid firm overseas cues.

Meanwhile Morgan Stanley upgraded India to ‘overweight’ from ‘equalweight’. Here are 5 reasons why the global financial services firm revised its rating.

1) According to Morgan Stanley, valuations of Indian markets have become more attractive as compared to other emerging markets.

2) India is still trading at 36 per cent premium versus MSCI Emerging Markets, which it believes is fair given India’s macro stability and likely earnings trajectory gap versus the rest of emerging markets.

3) Rising dividends, GST Bill prospects, further monetary policy easing are major potential catalysts for Indian equities.

4) Expectation of good monsoon this year may further support stock markets in India.

5) It further expected 3 per cent earnings growth in FY2016 and a 14 per cent year-on-year growth in FY2017.

(With inputs from Reuters)

 

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