Chris Wood trims India exposure; UBS, Bernstein cautious on Indian equities

Besides Wood, analysts at Bernstein and UBS, too, have reiterated their cautious stance on Indian equities. Those at Bernstein cut their rating on India to 'neutral'

Christopher Wood, global head of equity strategy at Jefferies, has trimmed his exposure to Indian equities by 2 percentage points (ppt) to 13 per cent in his Asia Pacific ex-Japan portfolio. Analysts at UBS and Bernstein too are cautious about Indian stocks.

 

“Weightings in the Asia Pacific ex-Japan relative-return portfolio have been adjusted. The weightings in Korea and Taiwan will be increased by 2 ppt and 1 ppt respectively, while the weightings in India and China will be reduced by 2 ppt and 1 ppt,” Wood wrote in his weekly note to investors, “GREED & fear”.

 

Most investors are not positioned yet to make a switch from North Asia technology stocks to India. “Much more typical is the positioning of one emerging market (EM) investor GREED & fear talked to recently who was more underweight India than at any time for the past 14 years and vice versa for Korea. It is hard to see why that should change anytime soon, barring something dramatic," Wood said. 

 

The latest data from Jefferies Economic Indicator shows that India’s energy demand is picking up after the sector was hurt last year by a longer spell of monsoon rains. “Such data raises hopes that nominal gross domestic product (GDP) growth could reaccelerate to the 10 per cent level this year. Still, what is really required for India to perform again in a relative sense is an unwind of the picks and shovels trade,” he said.

 

UBS, Bernstein stance

 

Bernstein cut its rating on India to “neutral”. “The Indian equity story for most of the last half-decade has been scripted in cinematic strokes: Record-breaking systematic investment plans, unprecedented government capex, and China+1 narrative that felt like it was India’s destiny,” it said in a recent note.

 

The ink is beginning to run thin in 2026, the research and broking house said. This, however,  is not a crisis but India being burdened by its own past.

 

“It’s the year that promises many things: Few rate cuts, a slight return of private capex, and a tentative trade deal – but we believe these 'little bits of everything' do not carry enough momentum to keep the India story at heights we’ve been used to seeing. We’re cutting India to neutral, not because the story has turned negative, but because it might be a bit quieter than one we’ve seen before,” said Venugopal Garre, managing director at Bernstein, in a coauthored note with Nikhil Arela. 

 

At the bourses, the Sensex and Nifty have gained 3.5 per cent and 3.1 per cent in 2026. Nifty Midcap 100 and Nifty Smallcap 100 have lost 3.5 per cent and 5 per cent, data shows.

 

Bernstein said that while 2025 was a modest year for earnings — even after assuming a 13.5 per cent earnings compounded growth over FY28 and a 19x multiple on two-year forward earnings per share —  it has set a Nifty target of 28,100, up around 11 per cent from the current levels.

 

Analysts at UBS are also underweight on India despite a stark underperformance compared to EM in 2025. Weak nominal GDP growth trend, MSCI India's fundamentals tracking weaker than the rest of EM, lack of clear artificial intelligence beneficiaries in the listed space, and valuation premiums still higher than usual are the key reasons for their stance.