India, after being a strong outperformer in 2018, is likely to be a laggard in 2019, said Adrian Mowat, EM equity strategist.
“I think there was undue bearishness around the global economy particularly the US economy what is the IT sector is very sensitive to. The other thing to remember in the final quarter of last year was that the rupee had been very weak for much of 2018 and began to recover as we went into the later part of the year so you have two negatives working against the IT space…,” he said.
“I think there is a chance that Nifty breaks through higher but it will be taking clues from other equity markets. However, I think there is more upside in other emerging markets (EMs) and also in the US equity markets. If the China data begins to respond to more accommodative policy, then the chance of Chinese equities continuing their outperformance … is very strong, a resolution and a trade dispute between the US and China would be very strongly reflected in the Korean and Taiwanese markets, which are the second and the third largest markets in EMs. These are the markets with the biggest exposure to exporters. So if we will get a resolution on that, I think we will get strong outperformance out of Korean and Taiwan. So India, after being a strong outperformer in 2018, is probably going to be in a bit of a laggard,” he mentioned.