Morgan Stanley downgrades India to ‘equal weight’
AND OfficeLast updated: Mar 07, 2026 07:39:00 IST
Synopsis
Morgan Stanley downgraded India to “equal weight”. This decision is due to geopolitical uncertainties and oil supply problems. The firm remains positive on Japan, Brazil and Singapore. Even though the Indian economy is more stable amid rising oil prices, AI disruptions and high valuations are also factors to consider.
ETMarkets.comThe brokerage said the MSCI Asia-Pacific fell 16% between March and July 2022 following the Russia-Ukraine conflict and impacts on the energy market, before stabilizing briefly and then falling further amid a global stock market correction and tech downcycle.
Mumbai: Morgan Stanley has downgraded India has ‘equal weight” in Asia and emerging markets, citing uncertainty around geopolitical developments And oil supply risks. The brokerage said it remained overweight on Japan, Brazil and Singapore.
“While significant uncertainty remains about the path forward, from a markets perspective, we believe developments in the Middle East remain in an escalating phase and warrant continued caution,” Morgan Stanley strategists, including Jonathan Garner, said in a note to clients.
Brokerage firm says India’s situation has improved macroeconomic stability This position makes it less exposed to rising oil prices than in the past, but concerns about the fallout from AI-related disruption remain. “With uncertainty still lingering around AI disruption and absolute valuations still expensive, we expect this to take some time – and potentially a spike in the market. technological cycle for Korea and Taiwan – before international investors reposition towards India,” Morgan Stanley said.
The brokerage said India, Thailand, Korea and Taiwan would be more exposed to growth risks due to their larger oil and gas balances, while the Philippines, Indonesia and India could face some pressures from larger current account deficits.
“Asia/EM stocks find themselves at a crucial time here, with a baseline of multi-week disruption and uncertainty in shipping, and risks of an escalation scenario characterized by more severe disruption than in 2022 (which was more concentrated in European energy markets),” Morgan Stanley said. The brokerage said the MSCI Asia-Pacific fell 16% between March and July 2022 following the Russia-Ukraine conflict and impacts on the energy market, before stabilizing briefly and then falling further amid a global stock market correction and tech downcycle.
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