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(Bloomberg) -- A long-time India bull, which recommended the country’s stocks even at the height of an emerging-market sell-off in 2018, just fell in with the bears.WisdomTree Investments Inc., with $64 billion under management, says it hasn’t lost faith in the country’s growth story, but it’s concerned rising political and social tensions will delay an economic recovery from the slowest pace of growth in six years. That contrasts with the asset manager’s earlier stance, when it called India a “haven” amid global trade disputes.The New York-based fund manager joins the growing ranks of global money managers who had touted the South Asian nation as their favorite pick for years, but now see threats to the investment case. A policy pivot by Prime Minister Narendra Modi’s government has seen controversial political issues take precedence over economic matters.“Modi’s latest initiatives are creating divisions over religion and national identity,” said Aneeka Gupta, an associate research director at WisdomTree’s London office. “Communal tensions between Hindus and Muslims are at risk of dragging on for years. Recovery is likely to be slow and protracted in 2020.”WisdomTree has downgraded its view on India from marketweight to underweightSays Mumbai stocks’ “sky-high valuations are unjustified” by current fundamentals “as earnings per share has been flat for a decade”Protests in India Steer Bond Manager to Shift Funds to ChinaHow the World’s Fastest-Growing Economy Plunged Into StagflationIndia was the world’s fastest-growing major economy until about a year ago, when a slowdown took hold amid waning consumer demand, rural hardship and ballooning bad loans in the banking system. The 4.5% expansion in the July-September period was about half of the growth rate in the same quarter three years earlier.Why India’s Students Are Angry, Its Muslims Worried: QuickTakeTo contact the reporter on this story: Selcuk Gokoluk in London at sgokoluk@bloomberg.netTo contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Srinivasan SivabalanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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