Credit Suisse reduced India’s rating to ‘Underweight’ from ‘Overweight’ owing to rising oil prices, according to CNBC-TV18. It referred to the cut as ‘tactical’.

“We tactically cut India’s position to underweight from overweight and will look for opportunities to re-enter the Indian market,” Credit Suisse told the channel.

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“Our downgrade of India is tactical and largely based on higher oil prices. Oil hurts the current account and adds indefinite pressure besides increasing sensitivity to United States Federal Reserve rate hikes,” they said.

It, however, added that it still liked “India’s positive EPS revisions and positioning in credit and property cycles”, further stating that it would use funds freed from India to raise China to ‘Overweight’ from ‘Market Weight’.

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The agency noted that in Asia, India is “most vulnerable to higher oil prices, along with the Philippines” and “rich valuations magnify the short term risks.

“We will use the funds freed from India to raise China from Market Weight to Overweight,” it added.

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The prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about rising inflation.

Oil prices rose to their highest level since 2008 as the United States and its European allies pondered barring Russian oil imports in reaction to Russia’s invasion of Ukraine, while it became less likely that Iranian oil would return to global markets soon.

As Western allies explore more sanctions against Moscow over Ukraine, Russian Deputy Prime Minister Alexander Novak warned Monday that a restriction on Russian oil imports would have “catastrophic” effects.

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“A ban on Russian oil will lead to catastrophic consequences for the global market. The surge in prices will be unpredictable — more than $300 per barrel, if not more,” Novak said in remarks carried by Russian news agencies.