Adrian Mowat OF JP Morgan said that China, which has been a laggard, is beginning to outperform. He is overweight on India and believes that there will be inflows into emerging markets in general. His Nifty target stands at 10,000 by 2016-end.
Among sectors he is underweight on, he includes IT and healthcare. The Indian IT is an investment capex play on the corporate sector, he said. Even if the US Fed hikes rates, it won’t be bad news, he says, adding that Fed will be raising rates from low levels to normal levels. “That is a positive sign.” He is looking forward to a 25 basis point cut in repo rate in the final quarter (Oct-Dec) of the year. "We expect the RBI to be data dependent," he said. Monsoon trending lower than expectations is a negative, he said, adding that it is important that the rural sector enjoys the benefits of a good cloudburst. He also spoke on banks. He is neutral on ICICI Bank and SBI , while overweight on HDFC Bank. In the financial space, he thinks the housing finance story is working well. “The underlying dynamic is a large delivery of units is coming through. If you look at household debt to GDP, it is very low.” He also flagged some questions that remain about credit quality.
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