Credit Suisse downgrades India, moves money to China

Surging crude oil prices is a nightmare for India! Credit Suisse has downgraded India as it cut down its position on the country to 'underweight' from 'overweight'.

EJ Biz highlights Credit Suisse's rationale for the downgrade and the money is moving-:

• India is the Asian market we consider most vulnerable to higher oil prices
• Higher oil prices hurt the current account, add to inflationary pressures
• Rich valuations magnify the short-term risks
• Surging crude prices will also make India more sensitive to impending Fed rate hikes
• To use the funds freed from India to raise China from Market Weight to Overweight.

Also read/watch | Crude prices likely to surge to $200/bbl

Foreign institutional investors have been offloading their holdings in the Indian equity markets for the last sixth months. FIIs have pulled out more than $14 billion from the Indian market since October 2021.

Also read/watch | US markets collapse, commodities surge on shortage concerns