India has been identified as the leading emerging market by Jonathan Garner from Morgan Stanley, according to a report published on Thursday. The recognition comes in light of India's strong economic and earnings growth, robust macro-stability setup, and consistent domestic and foreign direct investment inflows.
India has notably outperformed the MSCI Emerging Markets Index, surpassing it by a significant 45.5 percent in dollar terms from the start of 2021 until October 2022. This substantial growth reflects the strength and resilience of the Indian economy amidst global economic uncertainties.
Inflation concerns in India have been mitigated following the drop in the Consumer Price Index (CPI) to 5 percent in September, with core CPI further slowing to 4.6 percent. This decrease in inflation rates is expected to provide a more stable environment for continued economic growth.
The same report also upgraded Singapore and Poland to Overweight markets, influenced by their strong earnings trends and beneficial political shifts respectively. Singapore's upgrade was predominantly driven by its robust earnings trend, while Poland's upgrade was influenced by recent positive political changes.
On the other hand, South Korea and the United Arab Emirates were demoted to Equal Weight due to ongoing macroeconomic challenges and geopolitical uncertainties respectively. South Korea faces several macroeconomic issues that have affected its market status, while geopolitical uncertainties have led to a downgrade for the UAE.
The report emphasizes the dynamic nature of emerging markets and underscores the need for investors to remain vigilant about changing economic conditions and geopolitical factors that can impact market performance.
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