Tide’s Turning For Healthcare, IT, Manufacturing, Says JPMorgan’s Sullivan
Rupee weakness is halting the trend of negative earnings revisions in India, according to JPMorgan.
"We are starting to see positive earnings revisions in specific sectors, like healthcare, information technology services and manufacturing - essentially sectors that are benefiting from the rupee weakness," James Sullivan, the head of Asia ex-Japan equity research at JPMorgan, told BloombergQuint in an interview.
The Indian rupee has dropped over 12 percent in 2018, making it Asia's worst-performing currency.
Global investors are “positioned very long India and that’s very different from what we are seeing in regional markets like China”, Sullivan added on the sidelines of the JPMorgan India Investor Summit 2018.
Here are the other highlights from the conversation with Sullivan:
- Indian markets will see volatility going into general elections next year.
- Some of the pressures over widening current account deficit will begin to mitigate going forward.
- There's potential for outperformance in emerging markets, subject to stability in the dollar and earnings upgrades.
- Global markets have priced in rate hikes from the U.S. Federal Reserve this year and next.
- Don’t see a significant upside for oil prices.
- The base case for U.S.-China relations has to be continuous ratcheting up of trade tensions. It’s very difficult to see this situation getting better in the near future.
Watch the full interview here.