New Delhi, July 11: Macquarie Equity Research has downgraded Indian to ‘underweight' and says it is more prone to outflows by foreign institutional investors.
"Our overweight call on India since our inaugural country/sector allocation launch piece has worked out reasonably well, at least in local currency terms. Now we are downgrading India to 'underweight' from 'overweight' earlier," it said in a note.
"In our regional framework, India ranks poorly and it seems negative earnings revision cycle is accelerating for the India Inc," it noted. It said the country scored less on most liquidity ratios, due to high twin deficits and a lack of reforms.
Macquarie also said it believes that the global economy will not recede further – in fact it might improve somewhat over the next 3-6 months -- and so long as global liquidity continues to decline, there is a reasonable chance that MSCI China's performance would improve. "Hence, we remain overweight China," the report said.
