Indian stock market upgraded by UBS, who still finds better risk-reward in China

Brokerage firm UBS has upgraded India’s equity markets to “neutral” on Thursday, April 24. They were earlier “underweight” on Indian equities.

However, the brokerage has cited multiple factors as to why it has not upgraded Indian equities to an “overweight” rating, despite a correction seen in the benchmark and broader market indices.

UBS went on to write in its note that it still sees a better risk-reward in China within Emerging Markets, although it has downgraded Hong Kong equities to “neutral” as well.
The brokerage has tactically moved domestic and defensive-oriented in its market positioning, which became one of the reasons behind the Indian upgrade.

It now prefers markets that not only have attractive fundamentals, but also showcase some important characteristics, such as:

• EPS resilience to GDP slowdown post US tariffs
• High domestic topline exposure at the index level
• Most resilient EPS trends over the last 15 years
• Are beneficiaries of lower oil prices

This is a developing story.