The sharp underperformance of the Indian equity market might be bottoming, barring oil prices and any systemic risk from the fallout of the nuclear accident in Japan, Deutsche Bank strategists said in a note to clients.
The Bombay Stock Exchange benchmark, the Sensex, has underperformed the MSCI India index by seven percentage points in this year so far. “We see the markets reaching an inflection point in April-May and a directional shift upwards setting in, during 2H2011 (second half of the calendar year),” Abhay Laijawala and Abhishek Saraf, strategists at Deutsche Bank, wrote in the note. According to them, April and May are likely to be important for the Indian markets due to factors such as release of Indian monsoon forecast, election results of five Indian states and a group of ministers’ meeting to discuss contentious issues on coal mining and environmental approvals.