JPMorgan Differs With Goldman on India Stocks Outlook Ahead of National Vote

Ashutosh Joshi
·1 min read
1

(Bloomberg) -- JPMorgan Chase & Co. strategists upgraded Indian stocks to overweight on optimism that higher government spending ahead of next year’s elections will boost consumption and market sentiment.

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“Nifty has delivered 13% returns in the six months leading up to a general election since 1991,” strategists led by Pedro Martins Junior wrote in a note on Thursday. As the election 2024 draws near, “the government may consider fresh initiatives like supporting rural and urban poor and additional expenditures aimed at boosting public sentiment.”

JPMorgan’s view on Indian equities differs from Goldman Sachs Group Inc., which earlier this month said global headwinds and rich valuations requires a cautious approach ahead of the 2024 elections. Local shares have beaten emerging market gauges this year, though the outperformance has come under pressure as the spike in US yields and the Middle East tensions have hurt appetite for riskier assets.

JPMorgan had upgraded India stocks to neutral from underweight on June 14 this year. Since then, the NSE Nifty 50 Index has risen 1.6% versus 9.7% plunge in the MSCI Asia Pacific Index.

Foreign investors have taken out $3.6 billion from Indian stocks since the start of September, after plowing in a net $21.3 billion over the preceding six months.

Still, there are several reasons to be positive about India over the longer term, including rising wealth and faster growth amid the nation’s aspirations to be seen as an alternative to China, the strategists wrote.

Separately, JPMorgan upgraded Saudi Arabia to overweight from neutral as oil trades at a premium. They downgraded South Korea to neutral from overweight, suggesting profit taking from its outperformance to emerging market peers.

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