After downgrading Indian equities recently given their rich valuations, Morgan Stanley sees emerging markets (EMs) ‘struggling’ for returns in calendar year 2022 (CY22) amid rich valuations. Despite downgrading India, the global research and brokerage house remains ‘structurally bullish’ on Indian equities and is looking for stock-level opportunities to hold exposure. Among sectors, it has maintained an overweight stance on the consumer discretionary space.
At the broader level, however, the only exception is Japan where they see expect a double-digit return of 12 per cent (TOPIX target of 2250) in CY22. Among the other regions, Morgan Stanley maintains an overweight position