Morgan Stanley, CLSA warn of volatility in Indian market

Morgan Stanley and CLSA, two of the most respected brokerages on Dalal Street, are taking a cautious approach to India’s stock market in the current year due to a host of reasons that include the upcoming Lok Sabha polls, cues from the US market, geopolitical factors and relatively higher valuations. In its report, Morgan Stanley said although recent state polls signal that the BJP-led coalition will come back to power after the Lok Sabha polls, yet till the results are out the Indian market will remain volatile. File photo: IANS MUMBAI: Morgan Stanley and CLSA , two of the most respected brokerages on Dalal Street, are taking a cautious approach to India’s stock market in the current year due to a host of reasons that include the upcoming Lok Sabha polls , cues from the US market, geopolitical factors and relatively higher valuations.

In its report, Morgan Stanley said although recent state polls signal that the BJP-led coalition will come back to power after the Lok Sabha polls, yet till the results are out the Indian market will remain volatile. In addition, cues from the US market that include expected interest rate cuts by its central bank, could lead to volatility in the Indian market. Analysts at Morgan Stanley also expect geopolitical factors would not allow crude oil prices to be stable which in turn could impact India.

Morgan Stanley report, however, said that a host of factors like strong macro fundamentals, corporate earnings growth of 20% over the next 3-4 years, a reliable domestic primary market for funds would reduce volatility in the Indian market relative to other emerging markets. On its part, a CLSA report said that the Indian stocks market started the new year with extreme bullishness, a relatively high valuation and a record discount to debt yields. “Notwithstanding, India’s exciting long-term growth story and the prospect of a third term for popular PM Modi, this stretched starting point may weigh on returns this year.

We believe equities are pricing in a ‘perfect’ US soft landing and any disappointment on growth or sticky inflation will hurt stocks,” the report said. FOLLOW US ON SOCIAL MEDIA Visual Stories Previous 10 Most Affordable Cities in India to Buy a House business Most Visited Monuments in India business The Pros and Cons of Investing in Value Stocks business Investing in Small-Cap Stocks: Top 10 Tips for Absolute Beginners business 10 Ways to Earn Money Online by Selling Physical Products business Richest Cricket Players Across the World business 10 Things You Didn’t Know About Warren Buffett’s Investment Process business Priyanka Chopra Net Worth: Know How Rich is Global Actress business Top 10 Benefits of Investing in Small-Cap Stocks business 15 Best Tax Saving Schemes in India business Next 1 2 3 Elections Chhattisgarh CM News MP CM News Rajasthan Election Results MP Election Result 2023 Chhattisgarh Election Result Mizoram Election Result TOP TRENDS PM Modi Bilkis Bano Case Nigar Shaji India Maldives News Boycott Maldives India Covid Cases.