Morgan Stanley lowers India asset rating, wary of energy supply risks.

Morgan Stanley is taking a more cautious stance towards the Asian stock market and reducing exposure to the Indian market, out of concern that a war in Iran could disrupt the supply chain if oil transport through the Hormuz Strait cannot be restored. "We are maintaining a defensive posture," Morgan Stanley strategists Daniel Blake and Jonathan Garner wrote in a report on March 5, "Asia remains highly dependent on supplies from the Middle East in terms of crude oil, refined oil, and liquefied natural gas, and we believe the market is too complacent about the risks to the supply chain." In their latest asset allocation adjustment, these strategists downgraded India's rating from "overweight" to "neutral," citing India as one of the markets most vulnerable to disruptions in supply of Qatari LNG in Asia. They indicate that amidst uncertainty surrounding the outlook for artificial intelligence and high valuations, global investors may choose to wait, possibly until the technology cycle in Korea and Taiwan peaks, before increasing their allocation to India again.