HSBC downgraded Indian stocks to “underweight” from “overweight”.

In Asia, India remains one of the most over-owned market and according to the bank the potential for more equity outflows has increased as the foreign positions look stretched.

“Rate cuts beyond 2015…will depend on the government’s structural reforms. If they are coming, there could be further space to cut. But if not, the RBI may just have to sit tight,” wrote analysts Devendra Joshi and Herald van der Linde.

The investment bank also raised Philippines shares to “overweight” from “neutral” and Hong Kong to “neutral” from “underweight”. China and Singapore remain “overweight”.

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