Concerns over high valuations led Goldman Sachs to downgrade the Indian market
MUMBAI: Global rating agency Goldman Sachs has downgraded the Indian stock market. Goldman Sachs has downgraded the rating of Indian equity markets by one place to 'market weight' and attributed the downgrade to the historic rally in the stock market this year. Compared to the 0.3 per cent decline in the MSCI Emerging Markets Index, Indian stocks have risen by almost 4 per cent in 2021 due to easy lending policy, rapid vaccination and re-opening of the economy. Many other brokerage firms such as Morgan Stanley, Nomura and UBS have also been forced to downgrade their ratings in the Indian stock market in view of the sharp rise in valuation of the Indian stock market. "We believe that the risk-reward for Indian equity markets is less attractive at current levels," Goldman Sachs said in a report. Potential strong cyclical and beneficial reforms next year are positive on the current high valuation, although the market is facing other challenges such as higher crude oi