JP Morgan, Citi downgrade Indian stocks as rupee bites
India's weak macroeconomic indicators have prompted two global financial players to downgrade India's equities due to balance of payment issues and the sliding rupee today.business Updated: Aug 20, 2013 22:04 IST
India's weak macroeconomic indicators have prompted two global financial players to downgrade India's equities due to balance of payment issues and the sliding rupee on Tuesday.
JP Morgan has downgraded Indian shares to ‘neutral' from ‘overweight', citing strain in balance of payments. However, it upgraded China shares to ‘neutral' from ‘underweight'.
The brokerage added that it was slow in downgrading India, but if the rupee continues to slide, the Indian economy would continue to underperform.
Meanwhile, also lowered its target for India's benchmark index to 18,900 from 20,800, citing increasing uncertainty after the rupee's slide despite the Reserve Bank of India's measures to prop it up since the middle of July.
The target cut on the Sensex stands at 10% from former values and it closed at 18,246 on Tuesday, down 0.34%.
Foreign institutional investors (FIIs) sold shares worth a net Rs 680.08 crore on Tuesday, as per provisional data from the stock exchanges, agencies said.
The steady pullback of funds by FIIs from India following the expected withdrawal of a cheap money policy in the US is the key reason behind the rupee's fall.