Dear All,
Goldman Sachs Upgrades India back to market weight after a year at underweight, on a turn in the macro cycle, oil prices, valuation, and policy reform. "Given recent developments in the macro landscape, we are moving India to a marketweight (neutral) stance from underweight, which we have held for over a year. As we have written previously, the core arguments for our underweight stance were based primarily upon valuation concerns, inflation risks, and policy tightening overhangs.
In our latest piece Asia Pacific: Portfolio Strategy: India: staying underweight on May 13, we noted that we would focus on four key areas for signs that we should turn more optimistic on the Indian equity market:
(1) a turn in the macro cycle
(2) lower oil prices
(3) valuation
(4) policy reforms.
We believe enough progress has been made in these areas to warrant a relatively more optimistic view.
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