Credit Suisse has downgraded India to market weight in its country model portfolio with the country falling to number 8th spot from 6th spot. The brokerage said global monetary easing will help India more than most Asian markets but the depth of the economic downturn is beginning to translate into EPS cuts just as consensus forecasts for previously hard-hit north Asian markets are stabilising.
India’s GDP growth fell to a 6-year low of 5 per cent in the June quarter.
Credit Suisse has upgraded South Korea to ‘overweight’ from ‘neutral’ on improving tech outlook and reduced sensitivity to global currency movement. With this, South Korea has moved to the top of Credit Suisse’s country scorecard.
The brokerage remains pessimistic on the outlook for the trade war, but said that there are signs that it is impacting equities markets less than before.
“Our greater comfort with the trade war enables us to increase our weighting in Korea, which has proven one of the more trade war- and renminbi-sensitive markets,” said Credit Suisse.
The brokerage has retained existing overweights on Taiwan, Singapore, Malaysia and Indonesia. Credit Suisse has an ‘underwight’ rating on Hong Kong/China, the Philippines and Thailand. The brokerage said Thailand is its biggest ‘underweight’ due to rich valuations and an overbought currency.