J.P. Morgan has downgraded Indian equities to 'neutral' from 'overweight', citing concerns over high valuations and potential earnings risks due to surging crude oil prices, particularly in light of the ongoing Iran conflict. The firm has reduced its year-end target for the Nifty 50 index by 10% to 27,000, following a significant decline in the index, which has fallen 8.5% this year. The report highlights that rising crude prices could lead to inflation and growth risks, squeezing consumer spending and affecting corporate margins. Additionally, J.P. Morgan has cut its earnings estimates for FY2027 across sectors like energy, consumer, auto, and financials by 2%-10%. Despite the current challenges, the brokerage maintains that India's long-term growth potential remains intact but warns that the near-term outlook has weakened. The firm continues to favor sectors such as financials, materials, and consumer discretionary, while remaining cautious on IT and pharmaceuticals.