Strategists at Goldman Sachs indicated that the recent decline in Asian stock markets has already absorbed the majority of the impact from the oil price shock, even as they lowered their 12-month target for the MSCI Asia Pacific ex-Japan index.
The regional index has fallen close to levels reflecting the anticipated effects of the oil shock, suggesting that the market has already priced in most elements of the current macroeconomic environment, according to the Goldman Sachs strategists. They reduced the target for the MSCI Asia Pacific ex-Japan index from 900 to 870 points, which implies a potential 15% return from Wednesday's closing price.
Since the onset of the Iran conflict up to Wednesday, the index has declined by 8.5%, while the S&P 500 index fell 4.2% over the same period.
The strategists also revised down their earnings growth forecast for the index in 2026 by one percentage point to 29%; the current consensus expectation stands at 35%.
Goldman Sachs maintained its overweight rating on North Asian equity markets, while downgrading its rating on Indian equities to neutral and reducing its rating on Philippine equities to underweight.
Comments