Developed markets might continue to outdo emerging mkts

Developed markets might continue to outperform the emerging markets (EMs) in 2016 also, say analysts. Global strategists at Citigroup say they remain constructive on equities in general, but favour the developed markets over the EMs.

The brokerage remains overweight on the euro zone and Japan equities due to the quantitative easing and the likely foreign exchange weakness. On the other hand, it is underweight on EMs. "This bull market is maturing and volatility is rising but it is too early to call its end, given where we are in the profit cycle," Citigroup said. Citi believes the best might be over for US equities.

"Richer and richer asset markets, against a global background of economic risks, have made us more cautious." Earlier, prominent brokerages including Credit Suisse, HSBC and JPMorgan had cut their weightings on equities.