After a quite depressed business and economic environment, India could be looking at a pickup in growth soon, believes Jonathan Garner, chief - Asia and Emerging Market equity strategist at Morgan Stanley. According to Garner, having some cyclicals in the portfolio would be advisable.
"We could be looking at a pickup in growth in India and therefore having some cyclicals in the portfolio would make some sense including industrial cyclicals and to some extent, consumer cyclicals and that’s different from what we are seeing in other emerging markets at the moment," said Garner in an interview with CNBC-TV18.
Garner is slightly 'overweight' on India and thinks the market can outperform the other emerging markets.
"The market is outperforming other markets in north Asia even though we have had some concerns on that front typically around Iran-Iraq tensions, we maintain small overweight on India," he said.
“A lower Brent oil price is sustained, it’s certainly quite favourable and there are important other domestic factors to consider in India... the Indian market can outperform others in Asia somewhat in this particular situation,” he added.
Garner is however worried about coronavirus.
"We think the Hong Kong, China equity markets are most impacted followed by other markets particularly in North Asia which have big trading linkages and complex supply chain linkages with China,” said Garner.
When asked about the Union Budget, he said, “We do have now a more transparent set of fiscal accounts. If we look forward, there is a marginal fiscal consolidation on a forward-looking basis but also an acknowledgement of lower than anticipated revenues for the current year. So in terms of stimulus, it’s not particularly large but fiscal prudent.”
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