Key Points

The firm has assigned India a recommended weighting of 21 per cent in the Asia ex-Japan equity portfolio--an overweight position compared to its 18.1 per cent share in the MSCI benchmark.

This marks India as one of the top regional preferences alongside markets like China.

The overweight stance comes at a time when global investors are rebalancing portfolios to reduce exposure to US dollar-denominated assets, amid signs that the greenback may have peaked.

Asian currencies, including the Indian rupee, are seen entering a phase of long-term appreciation, which enhances the appeal of regional equities to international investors.

While the report does not provide a detailed country-specific breakdown for India, its increased allocation reflects confidence in India's domestic demand story, economic stability, and policy continuity.

India stands out as one of the relatively resilient economies in the Asia-Pacific region, supported by strong private consumption, ongoing infrastructure investment, and a growing digital economy.

Jefferies' overweight recommendation aligns with broader market trends where India has consistently attracted foreign inflows and witnessed relatively better corporate earnings performance compared to peers.

In contrast to export-heavy economies that may face currency appreciation headwinds, India is better positioned due to its large internal market and a policy tilt towards self-reliance.

The report also noted a shift in preference from export-driven plays to more domestic-focused equities across Asia, a trend that benefits India.

It said "All this is a reason for global investors, be they equity or fixed income, to allocate more money to the Asian region even if currency appreciation is not great for export stocks".

Overall, Jefferies' bullish stance on India suggests that it sees the country not only as a key part of regional diversification but also as a core growth engine within the emerging market universe.

- ANI