The rationale for this move, Wood wrote in the latest Greed & Fear newsletter, is outlined in a fresh report by Mahesh Nandurkar, Jefferies’ Head of India Research. The five-point thesis? India’s macro immunity to the global mess.
Topping the list is India’s lower dependence on demand from the U.S. and China—making it less vulnerable to the kind of external shocks currently battering other export-heavy economies. This is followed by India’s relatively low tariff incidence, a strategic advantage in an era of rising protectionism.
Add to that declining oil prices, which help ease pressure on India’s inflation and current account, and the country begins to look increasingly attractive. Nandurkar also highlighted low foreign portfolio investor (FPI) allocations—suggesting room for fresh inflows—and the Reserve Bank of India’s pro-growth stance, which stands out amid a globally tightening monetary environment.
While Nandurkar expressed hope that Washington’s hardline trade stance may eventually soften, he said Jefferies continues to view weakening trends in both the U.S. and China as its base case.
As part of the same strategic shift, Jefferies has also increased its Underweight stance on IT and metals—sectors expected to bear the brunt of the global slowdown.
