Morgan Stanley sees 'secular bull market' in India, picks 3 leaders

In the ever-changing global economic environment, Japan and India stand out as secular bull markets in Asia, according to insights from Morgan Stanley.

Jonathan Garner, Chief Asia and Emerging Market Equity Strategist at the firm pointed out the significant economic growth both Japan and India are currently experiencing.

"I am pleased to say both the markets (Japan and India) are doing well as we go through the year-end reallocation process which is ongoing right now," Garner stated in a chat with CNBC-TV18.

He emphasised the Indian currency's stability against the US dollar, a key differentiator from other emerging markets. Despite the weakening of currencies like the Chinese renminbi, India's robust GDP and earnings growth are translating into strong dollar earnings per share growth.

"India is experiencing a complete breakout in performance relative to other major emerging markets and is our largest overweight," Garner remarked.

On Wednesday, November 29, the benchmark Nifty 50 closed over the 20,000 mark for the first time since September 13. The market capitalisation of all BSE-listed companies hit a new high of $4.03 trillion, making India one of the few countries with a market cap higher than the GDP.

Garner also shared insights into specific stocks, naming Reliance, L&T, Maruti, and ICICI Bank as part of their portfolio, signaling confidence in these companies as drivers of India's economic growth.

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Japan's Nikkei share average was also on track for its best month in two years on robust corporate earnings and expectations that the US Federal Reserve is done hiking interest rates. The Nikkei has gained 7.77% this month, the most since November 2020.

Japan's economy is currently showing a mix of growth and challenges. The country's economy saw a contraction of 0.5% in the third quarter, exceeding the modest 0.1% decline that analysts had anticipated, following a 1.2% expansion in the second quarter. This sluggish performance is expected to prompt the Bank of Japan to maintain its extensive monetary easing measures for longer.

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