Indian stocks are becoming "less interesting" as their valuation vis-à-vis other markets in the Asian region have declined considerably, Swiss banking major Credit Suisse said in a report.
"We believe India is becoming less interesting from valuation perspective," Credit Suisse Research Analysts Sakthi Siva and Kin Nang Chik said. In March 2009, India traded at a 40 per cent discount to the region (Asia), while currently that discount is just 2 per cent. The consensus EPS (earnings per share) revisions in India are also lagging in the region, the report added.
Though India is currently trading at a 2 per cent discount, it still looks favourable for the stocks compared to the 20 per cent premium the country traded at during the strong growth years from 2005-07, the report said.
Credit Suisse has, however, maintained an "overweight" status on the Indian market. The benchmark index Sensex, which opened at 9,647 points in 2009 closed the year almost double at 17,464, up 7,817.50 points (81 per cent) from the year ago level.
The Sensex witnessed a historic 81 per cent rally last year, boosted by the UPA victory in May 2009 on expectations that the new government would introduce measures to boost economic growth.
Another reason for the rally was the sooner-than-expected economic recovery of the country.
