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

Fri May 23, 2014 9:02am IST

A broker monitors share prices while trading at a brokerage firm in Mumbai May 13, 2014. REUTERS/Danish Siddiqui

A broker monitors share prices while trading at a brokerage firm in Mumbai May 13, 2014.

Credit: Reuters/Danish Siddiqui

Related Topics

Reuters Market Eye - 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.

FILED UNDER:
  • Most Popular
  • Most Shared

Insight

REUTERS SHOWCASE

Border Talks

Border Talks

India names Ajit Doval as special envoy for China border talks.  Full Article 

WTO Deal

WTO Deal

U.S. seeks to step up India trade talks  Full Article 

Phone Masts

Phone Masts

American Tower to buy Bharti Nigeria phone masts for $1.1 billion  Full Article 

Infrastructure Plan

Infrastructure Plan

India targets private cash to build railways to its ports.  Full Article 

Shadow Banking

Shadow Banking

Reserve Bank planning more measures for NBFCs.  Full Article 

Auto Sector

Auto Sector

Hyundai Motor, Kia Motors lift 2014 global sales target on China, emerging markets  Full Article 

Oil Prices

Oil Prices

Some fund managers see oil falling to $60 without OPEC cut.  Full Article 

Project Shelved

Project Shelved

Jindal Steel shelves $10 bln project after coal setback.  Full Article 

Market Eye

Market Eye

Sensex, Nifty rise to record after China, ECB stimulus boosts risk appetite.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage