Morgan Stanley downgrades Indian markets, advises partial sell-off

Is the latest global brokerage to either downgrade India or recommend higher allocation to other Asian markets

Morgan Stanley has downgraded domestic equities from ‘overweight’ (OW) to ‘equalweight’ (EW) and recommended taking some money off the table.

“We move tactically EW on India equities after strong relative gains. We expect a structural multi-year earnings recovery, but at 24 times forward   (P/E) we look for some consolidation ahead of Fed tapering, an RBI hike in February and higher energy costs,” Morgan Stanley equity strategist led by Daniel Blake and Jonathan Garner have said in a note on Asia Pacific markets.

The brokerage has upgraded Indonesia to OW, while maintaining an EW stance on China and UW on Taiwan.