India Equity Strategy: MNC Sentiment Index (1Q26): Dip from Elevated Levels

研报英文原文证据摘录

India Equity Strategy: MNC Sentiment Index (1Q26): Dip from Elevated Levels

IdeaM

What Is the Index Telling Us Right Now?

The MNC Sentiment Index index declined from a high base.

According to our proprietary index, while MNC sentiment toward India has

declined sequentially, it continues to track above its long-term averages in-line

with where it was last year in the same quarter. India’s policy work around lifting

corporate profits and boosting manufacturing and foreign direct investment (FDI)

in the context of a multipolar world likely drove the strong MNC sentiment over

the past few years.

Our MNC Sentiment Index shows a strong correlation with FDI inflows, and by

extension, capex. This supports stronger corporate profits and correlates with

share price performance. We are Overweight Consumer Discretionary, Industrials,

and Financials with a 12- to 18-month investment horizon.

Index Declined Sequentially

• The index remains above its long-term average. Economic conditions appear strong,

and India's evolving consumer pyramid, the multipolar world thesis, and

government policy support have all likely contributed to overall sentiment

( Exhibit 3 ).

• Relative to China, where we run a similar index, India has now outperformed for 19

consecutive quarters following six quarters of underperformance. MNC sentiment

toward China declined sequentially during the quarter ( Exhibit 2 ).

• From a geographical perspective, the sentiment index declined sequentially for

companies from across the globe, led by APxJ ( Exhibit 4 ). US companies continue

to record the highest absolute sentiment score.

• From a sector standpoint, Communication Services , Materials and Technology

declined in the most recent quarter, while Industrials and Consumer Staples rose

( Exhibit 5 and Exhibit 6 ).