Global investors have downgraded India’s rating to ‘neutral’ from ‘overweight’, says a survey of fund managers released by Bank of America-Merrill Lynch.
The survey had given India positive overweight rating in October 2014; this is the first downgrade since then.
The survey found that as the probability of a rate hike in December in the US is almost a done deal, given the country’s strong non-farm payroll data, investors are going long on the US dollar, with 67 per cent of respondents expecting the dollar to appreciate in the next 12 months.
Fund managers are also shorting commodity stocks and emerging market equity.
China moves up In Asia-Pacific, excluding Japan, India has fallen out of favour with investor panellists, to neutral from most overweight. “China moved up to most overweight as investors probably anticipate more easing from the authorities to combat the sharp slowdown and deflationary pressure,” the note said.
Except retail and industrials and may be a bit of banks and insurance, fund managers remain underweight/neutral on all the other sectors in the region, the report added.