However, this bull run is only halfway through, and small corrections will be followed by the Indian market reaching new heights. Morgan Stanley says that India’s weightage in the MSCI Emerging Markets Index has increased to 19.8% after the recent changes, while China’s weightage has decreased to 24.2%. India’s weightage has been consistently increasing since December 2020, when it was 9.2%, while China’s weightage has decreased from 39.1%.
Foreign investors like these stocks
Sector Investment
Consumer Durables 5,297
Information Technology 4,529
IT Services 4,251
Financial Sectors 2,782
Oil and Gas 2,518
Healthcare 2,369
Consumer Services 1,962
FMCG 1,815
(Investment amount in crores) The peak of the boom is yet to come
Morgan Stanley’s analyst Ridham Desai said that any correction in the Indian equity market will be mild. The market will continue to boom, as fiscal consolidation will boost private borrowing and spending, leading to the next phase of income growth and an increase in foreign investment. He said, “We believe that the Indian market still has a lot to offer, and its share in the Emerging Markets Index will increase.”
Advice to invest in large private banks
Morgan Stanley said in its report that the sources of possible corrections in the market are fundamental and technical. However, this does not mean that the bull market will end. The market’s valuation is high, and a correction may be seen in the Indian market as well, following a sell-off in the US. The global brokerage firm has advised investors to invest in large private banks instead of government and mid-sized private banks. It has also emphasized the need for investors to be more selective.
