JP Morgan: Don’t expect draconian COVID lockdown in India; focused on interest rate sensitive banks, auto stocks

We are focused on interest rate sensitive stocks like banks and autos in India, said James Sullivan, MD-Asia Equity Research at JP Morgan, on Monday. Sullivan also said he is not expecting draconian lockdown measures to be imposed in India.

Speaking in an interview with CNBC-TV18, Sullivan said, “For India, in particular, the key thing to focus on is the fact that the overall momentum of economic recovery is likely to slow and the key thing that we are focusing on is the earnings upgrade; we do see earnings upgrade breadth starting to narrow, in which case we think market breadth will also, therefore, likely narrow significantly. So we are focused on interest rate sensitives like banks and a bit on the auto space.”

Speaking about the ASEAN markets vis-à-vis India, he said, “We are still a bit more positive on the Association of Southeast Asian Nations (ASEAN) markets which have fallen significantly; India, obviously, close to all-time high right now. We are positive on elements of India but one of the key things we are focused on is not valuation but it's more than narrowing of market breadth and therefore, there are limited factors that we are actively participating in.”