JP Morgan downgrades India to underweight, flags earnings risks – News Air Insight

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JP Morgan downgraded India to neutral, citing elevated valuations relative to emerging market (EM) peers, earnings risks, and limited exposure to next-gen technology. The brokerage’s 2026 target on the Nifty is at 27,000, implying an upside of almost 13% over Friday’s close of 23,897.95

“Already bruised by a dismal 2025, the Nifty 50 could be headed for another challenging year, in our view, driven by tactical headwinds,” said JP Morgan’s strategists led by Rajiv Batra in a client note friday.

On Thursday, HSBC downgraded India to underweight from neutral-its second in two months-as inflationary pressures, fuelled by elevated oil prices, and demand pressures may weigh on earnings growth.

JP Morgan said India’s historical ‘scarcity premium’, owing to its high growth and policy stability, is facing challenges due to growth concerns over last eight quarters.

Even though India’s valuation gap with the MSCI EM index has narrowed to 65% (versus the 109% peak premium), stocks still trade at a significant premium to peers like Korea, Brazil, China, Mexico and South Africa, which “offer an inexpensive entry point for higher or similar forward earnings growth”, according to the brokerage.



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