India’s economy is gaining global credibility while America and China struggle with economic slump. Morgan Stanley’s newest study suggests this. Morgan Stanley upgraded India to ‘overweight’ on Wednesday.
However, the agency has severely harmed China. The brokerage downgraded Chinese equities. Fitch Ratings, a top credit rating agency, downgraded the US earlier.
The brokerage business believes India’s economic reforms and macro-stability program would boost capital spending and profits. Morgan Stanley anticipates India’s economic growth. Stanley expects India will have a lengthy bull run while China is ending.
Morgan Stanley’s research says India’s future is similar to China’s. The research stated, “India is arguably at the start of a long wave boom at the same time as China may be ending one.” India’s GDP projection of 6.2 percent is on track. China’s GDP growth will be 3.9 percent and India’s 6.5 percent by the decade’s conclusion.
While China’s working-age population has declined since the start of the decade, India’s demographic trends are favorable. “India rises from 6 to 1 in our process, with relative valuations less extreme than in October, and India’s ability to leverage multipolar world dynamics is a significant advantage,” Morgan Stanley analysts said.
Four months earlier, on March 31, the brokerage company raised India from underweight to equal-weight. Morgan Stanley named India the most desirable emerging market.
Morgan Stanley predicts a December 2023 Sensex of 68,500. If commodity prices don’t rise and the US doesn’t go into recession, this goal will be reached.
What is overweight India?
Overweight markets outperform other markets, according to research firms. Equal-weight markets should perform similarly. Underweight markets are trailing.
Chinese stocks downgraded
Morgan Stanley downgraded to ‘equal-weight’ due to worries about China’s economic prospects. After the stimulus-driven rise, economists recommended investors to remain cautious and take gains.
USA degraded.
Earlier, the rating agency Fitch had given a blow to the world’s largest economy i.e. USA. On Wednesday, veteran rating agency Fitch downgraded America’s rating. Fitch has downgraded the US rating to AA+ from AAA. US stocks fell afterward.
Conclusion:-
India’s economic reforms and macro-stability agenda have led to a rise in global trust in the Indian economy, according to Morgan Stanley’s latest report. The brokerage firm upgraded India’s rating to ‘overweight’, while downgrading its rating on Chinese stocks. This follows Fitch Ratings’ downgrade of the United States’ credit rating. Morgan Stanley believes that India’s economic reforms and macro-stability agenda support a robust capital expenditure and profit outlook. The report predicts India’s future to resemble China’s history, with India arguably at the start of a long wave boom and China may be ending one. India’s economy is on track to achieve a GDP forecast of 6.2%, while China’s GDP growth rate is around 3.9% compared to India’s 6.5%. Demographic trends favor India, with China’s declining working-age population. Morgan Stanley analysts believe India’s ability to leverage multipolar world dynamics is a significant advantage. The company has set a Sensex target of 68,500 by December 2023, but this target will only be met if there is no significant rise in commodity prices and no recession in the US.
