Jefferies' Christopher Wood Adds MCX, Lenskart to India Portfolio

Jefferies strategist Christopher Wood has made significant changes to his India long-only portfolio, removing HDFC Bank and PB Fintech while adding Multi Commodity Exchange of India (MCX) and Lenskart Solutions.

The portfolio, which is benchmarked against the MSCI India index, has added MCX, Lenskart, and Bajaj Finance with a 4% weight each. Wood also replaced REC with Bajaj Finance and adjusted allocations for several other holdings.

The financial sector remains the largest allocation in the portfolio, accounting for 26% of total holdings. SBI Life Insurance, Adani Ports, and GMR Airports continue to have the highest individual allocations at 6% each. Other major portfolio holdings include ICICI Bank, State Bank of India, Tata Capital, Cholamandalam Investment and Finance, JSW Energy, Adani Energy Solutions, DLF, Lodha Developers, IndiGo, and TVS Motor.

The reshuffle comes as foreign investors have returned to Indian equities after four consecutive months of selling. Wood estimated net foreign purchases in July at $2.45 billion, attributing the reversal partly to investors reducing exposure to crowded artificial intelligence and semiconductor-related trades.

Wood highlighted strong domestic demand and improving credit growth as key factors supporting the Indian market outlook. According to RBI data, bank credit growth stood at 17.7% year-on-year in the fortnight ended July 15, although it moderated from 18.6% in the previous fortnight.

The strategist noted that corporate lending growth was around 20%, ahead of agriculture and retail credit growth. He also pointed to continued strength in automobile and real estate demand. Wood said measures to attract overseas capital could help stabilise the rupee.

He highlighted the RBI’s special window for new three-to-five-year foreign currency non-resident (FCNR-B) deposits, under which the central bank absorbs banks’ currency hedging costs and provides regulatory support.

The changes to Wood's portfolio reflect his outlook on the Indian market, which is supported by strong domestic demand and improving credit growth. The addition of new stocks and adjustment of allocations are expected to have an impact on the portfolio's performance.

In terms of the Indian market outlook, Wood's views are significant as they reflect the sentiment of foreign investors. The return of foreign investors to Indian equities after four consecutive months of selling is a positive sign for the market.

Overall, the changes to Wood's portfolio and his outlook on the Indian market are important developments that will be closely watched by investors and market participants.

The Indian market is expected to continue to be supported by strong domestic demand and improving credit growth. The measures taken by the RBI to attract overseas capital are also expected to help stabilise the rupee.

In conclusion, the changes to Wood's portfolio and his outlook on the Indian market reflect the positive sentiment of foreign investors and the strong domestic demand and improving credit growth in the Indian economy.