JPM downgrades India to neutral

JPMorgan cut Indian equities to neutral from overweight on April 24, saying valuations remain high and oil-linked earnings risks have risen. (reuters.com) The bank said India still trades at a premium to emerging-market peers including Korea, Brazil, China, Mexico and South Africa. It cut its 2026-end Nifty 50 target by 10% to 27,000. (reuters.com) (moneycontrol.com) JPMorgan also lowered MSCI India earnings growth forecasts for 2026 and 2027 by 2 and 1 percentage points, respectively. Sector analysts cut financial year 2027 estimates by 2% to 10% across key industries, according to reports on the note. (reuters.com) (moneycontrol.com) The trigger was a jump in energy risk after the Iran war disrupted supply expectations and pushed up crude prices. JPMorgan said that raises the odds of weaker corporate margins, higher inflation and pressure on the rupee. (reuters.com 1) (reuters.com 2) The downgrade landed a day after HSBC cut India to underweight from neutral, also tying the call to surging energy prices and a weaker earnings recovery. Two global banks turned more cautious on India within 48 hours. (reuters.com 1) (reuters.com 2) Indian markets were already under pressure that day. The BSE Sensex fell 999.79 points, or 1.29%, to 76,664.21, while the NSE Nifty dropped 275.10 points, or 1.14%, to 23,897.95. (thehindubusinessline.com) Foreign institutional investors also sold shares, with exchange data showing net equity outflows of 3,254.71 crore rupees on April 24. Reuters separately reported the rupee’s trade-weighted valuation had fallen to its lowest level in more than a decade. (thehindubusinessline.com) (reuters.com) JPMorgan did not abandon the long-term India story. Reports on the note said the bank still sees structural growth support, but argues near-term risk and reward no longer justify an overweight call. (business-standard.com) (news18.com) For now, the message from global brokerages is narrower than a verdict on India’s economy. It is a warning that expensive stocks and higher oil can quickly change the case for owning them. (reuters.com)