Overweight on Indian equities; caution still warranted

Expectations of a rebound in corporate earnings, a soft landing in the US and India's macro resilience augur well for Indian equities,

- Manpreet Singh Gill, chief investment officer, Africa, Middle East & Europe, Standard Chartered

Manpreet Singh Gill, chief investment officer, Africa, Middle East & Europe, Standard Chartered, tells Mahesh Nayak in an interview. With inflation contained and more rate cuts likely, equities are favoured over bonds, gold and cash, Gill says. Excerpts:

Where are you advising your clients to invest in this market? And why?

We expect economic and earnings growth to revive in H2 2025, driven by easing financial conditions and fiscal boosts like income tax cuts. We are overweight on Indian equities, preferring a diversified allocation. Bonds and gold are neutral, while cash is underweight. Investors should be selective in risk-taking, as the worst for Indian assets may be behind us. Caution, however, is still warranted.

You are overweight on India. Is this driven by structural conviction or tactical positioning?

We are bullish on Asian equities (ex-Japan), expecting them to outperform globally over the next 12 months. Within Asia, we are overweight on China and South Korea due to attractive valuations and positive cyclical drivers. We stay bullish on India's medium-term prospects. India possesses a strong core holding, driven by large domestic economy, improving macro fundamentals, easing financial conditions and a stable policy environment, despite stretched valuation premiums over north Asian peers.

Which sector are you overweight on and why?