Nomura has downgraded domestic equities from ‘overweight’ to ‘netural’ citing unfavourable risk-reward. The global brokerage is recommending reallocating funds to China and other ASEAN countries, which have underperformed India so far in 2021.
“We now see an unfavourable risk-reward given valuations, as a number of positives appear to be priced in, whilst headwinds are emerging. We, thus, downgrade India to neutral in our regional allocation and will look for better entry points given our still-constructive medium term view. We like China (significant underperformer seeing stabilising sentiment) and ASEAN (tactically laggard reopening play),” said Nomura equity strategists Chetan Seth and Amit Phillips