Morgan Stanley has outlined its latest India Strategy, projecting that India is likely to outperform during a global bear market but may underperform in a global bull market. The firm believes the ongoing global uncertainty presents a buying opportunity for India’s long-term structural story, though it warns that investors must be prepared for periods of external-driven volatility.
According to the strategy note, patience will be key, as negative headlines from global markets could weigh on sentiment in the near term. However, the brokerage believes the long-term rewards from India will outweigh the short-term risks.
In terms of sector preferences, Morgan Stanley is overweight on domestic cyclicals, specifically backing financials, consumer discretionary, and industrials. The firm has adopted an underweight stance on energy, materials, utilities, and healthcare, reflecting a cautious outlook on sectors sensitive to global macro and commodity cycles.
The report emphasizes that the current environment is likely to favor stock pickers rather than those relying on top-down or macro-driven strategies, a shift from the broad-based trends witnessed during the pandemic years. Morgan Stanley added that it remains capitalization-agnostic, indicating a neutral view on large-cap vs. mid/small-cap allocations.
Disclaimer: This report is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks. Please consult a qualified financial advisor before making any investment decisions.
