Jefferies' Chris Wood Says India Best Post Covid Recovery Story In Asia

In his weekly newsletter titled Greed and Fear, Jefferies- global head of equity strategy- Chris Wood, showed his bullishness on Indian equities. Wood said, right now, India is the best post-COVID recovery story in Asia.

And for it, Wood attributed contribution from sharp decline in corona cases in the country as well as economic resilience. "With COVID cases in India now 88 percent off their peak amid growing hopes of herd immunity, India looks right now Asia's best post-COVID recovery story," Wood wrote in his weekly note to investors.

All, in all Chris stressed on the need of an economic downturn or aggressive tightening stance by the US Federal Reserve to have a 'real nasty unwind' at the global level for the equity market. But either of these events might not materialize.

And for the inflation, Wood suggest that prices of over $60 per barrel for oil is resulting in inflation fears especially for India which imports close to 70% of its oil requirement. And due to expectations of inflation on liquidity infusion globally, he prefers banks and oil-related stocks. "One of the favoured cyclical areas is, clearly, banks. Banks in Europe and Asia ex-Japan offer over 40 percent upside if they are simply re-rate to a level of one standard deviation below the long-run mean in terms of the relative price to book multiple," Wood said.

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