Here are five reasons why Goldman Sachs downgraded Indian equities

Stretched valuations and slowdown in DII flows are some of the reasons why Goldman Sachs cut its India rating to 'market-weight'

After remaining ‘strategically overweight’ on Indian equities since 2014, global research and brokerage firm Goldman Sachs has cut its India rating to ‘market-weight’ from ‘over-weight’. It expects the markets to consolidate ahead of the general elections and maintains a 12-month Nifty50 target of 12,000.

Indian equities, it says, have doubled over the past five years and have outperformed the region by 60 percentage points (pp) in $ terms. “Given the elevated valuations and the recent strong performance, we believe the risk/reward for Indian equities is less favourable at current levels,” wrote Sunil Koul of Goldman Sachs in a recent co-authored