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Credit Suisse "underweight" on Indian equities

Press Trust of India  |  New Delhi 

Global brokerage is "underweight" on Indian equities in an context, as the domestic equity market's premium has risen to the highest level.

The global in its strategy report said the MSCI index has fallen by the least as against and the

According to the report, fell just 9.9 per cent from the highs versus falls of 19 per cent for both MSCI and MSCI

"With continued downgrades to consensus EPS and weak ROE, India's premium on our P/B vs ROE valuation model has now risen to 64 per cent close to its highest ever," Research and said in the note.

reiterated its underweight call on in an context.

The brokerage believes overvalued markets could stay overvalued for longer than expected especially if the US-trade war escalates, but cautioned that India could be the next shoe to drop.

"We believe the current combination close to highest ever premiums versus the region, four consecutive years of downgrades to consensus EPS, current account deficit, rising further pressuring the current account and fiscal deficits and the fact that foreign investors have yet to capitulate suggest India could be the next shoe to drop," the report noted.

The benchmark Sensex is hovering around 35,300 points. It has gained 3.65 per cent so far this year.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 12:10 IST