06 April 2011

JP Morgan upgrades India

JP Morgan has upgraded India to Overweight. The reason behind this upgrade are three macro drivers: Decline in headline inflation; Normalization of the yield curve; And progress in passing legislation post 2010 corruption stalemate.The group has rated China as Neutral and downgraded Hong Kong to Neutral. They remain Underweight on Korea.

In its recent report JP Morgan analyses that Indian equities have started outperforming emerging markets after significant underperformace from October 2010.

Speaking about China, JP Morgan's Chief Asian and Emerging Equity Strategist Adrian Mowat had told CNBC TV18 in an interview on March 15 that the GDP numbers may need to be downgraded in China based upon some of the loan growth data, the monetary aggregates and the PMIs. "The economic backdrop is deteriorating at the same time as issues such as the Japanese earthquake, unrest in the Middle East are coming to fore once more."

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