economy
Europe and India are too sensitive to oil prices, says UBS
Monday's relief rally in equities offers an opportunity for investors to rotate into defensive assets, according to researchers at UBS.
TL;DR
- UBS analysts suggest rotating into defensive assets following a relief rally due to a delay in U.S. strikes on Iranian energy infrastructure.
- European and Indian equities have been downgraded to 'neutral' due to their high sensitivity to oil and gas prices, with Europe lacking energy self-sufficiency and India being a significant oil importer.
- Swiss equities are identified as a resilient option, offering attractive valuations after falling over 10% since the conflict began.
- Investors are advised to use the recent gold sell-off to increase exposure to the precious metal, seen as a hedge against geopolitical uncertainty.
- Other analysts, like MSCI, have also flagged emerging Asian markets as vulnerable to oil-supply disruptions.