- Morgan Stanley has upgraded India to “standout overweight” and designated it as the most-preferred emerging market.
- The upgrade is based on India’s relative economic and earnings growth, along with its ability to withstand a higher real rate environment.
- India has been structurally outperforming the MSCI EM index by 45.5% in USD terms from early 2021 until October 2022, and this trend is expected to continue.
- The country’s strong domestic flows and its attraction to both foreign direct investment (FDI) and portfolio flows have contributed to its standout status.
- India’s economic performance, reduced inflation concerns, and improving trade balance are among the factors supporting this bullish stance.