JPMorgan’s Asia Equity and Quant Strategist, Mixo Das, warned that the next four to six weeks could see a sharp uptick in volatility as investors grapple with oil price swings and the fallout from global geopolitical skirmishes. — The backdrop remains mixed: oil held steady, the Fed’s rate hikes are expected to continue, and the US mid‑term elections loom on the horizon.
But Das pointed out that the broader Asian equity landscape still has a supportive foundation. Earnings growth is on track, valuations are modest, and investor positioning is relatively light, all of which temper the short‑term downside.
Turning to AI, Das sees the sector as a potential catalyst. He said that the persistence of AI‑linked stocks will hinge on companies demonstrating real revenue streams from their AI investments. If monetisation continues, the AI boost should keep these stocks buoyant.
Looking ahead, Das remains constructive on equities in the region, citing strong earnings momentum and a solid macro backdrop. He added that the firm’s long‑term view on Asian stocks remains positive as long as earnings keep climbing.
The key takeaway for traders: brace for a volatile patch in the next month, but keep an eye on AI‑exposed names that could deliver upside if they prove their business models.
Investors should note that the volatility window is set to close in late October, after which the market might swing back to a more stable trend.
JPMorgan’s guidance for the next quarter remains unchanged, with a focus on monitoring oil price dynamics and the AI sector’s monetisation trajectory.
The firm’s stance on India equity is neutral, reflecting the uncertainty in the domestic market and the global macro environment.
Overall, the sentiment is mixed but cautiously optimistic, with a clear emphasis on AI as a growth engine for the near term.