Investors are still overweight on India, but they were significantly more overweight in 2015 than they are today, said Jonathan Garner, Chief Asia and Emerging Market Equity Strategist, Morgan Stanley.
Speaking exclusively to CNBC-TV18, he said, “We think we are nearing the end of a global economic upswing, that in this case has gone on for nine years. We have got tightening of monetary policy in the US and China. We have got the oil price starting to act as a headwind to growth and we have got quite high equity valuations as well.”
Speaking about expected rate hikes from Federal Reserve for FY19, Garner said, “Fed is largely, not completely, endogenous to the global economy in terms of how it evolves. So I am not that bothered as to whether it’s two or three hikes. The important thing is that it continues to hike.”
“There are some stocks that one can play the benefit from higher oil prices in this market. So one name that we have in our list over here is Reliance Industries Ltd (RIL), which is very positively geared to that,” Garner added.
“We broadly will prefer the information technology (IT) services names to the pharmaceutical names. The IT companies names are much more cyclical in terms of how they interact with the corporates in the advanced economies, which are likely to increase their capex spending and their IT services budget. Tata Consultancy Services (TCS) is the name that certainly has been highlighted by our analysts team,” Garner said.
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