Brokerage JPMorgan Chase & Co is very optimistic about Indian stocks among the so-called BRIC nations for the next year.

JPMorgan Chase & Co said that improvements in policy and easier monetary conditions in India will make Indian equities the top selection among BRIC nations in 2013.

A report by JPMorgan analysts Adrian Mowat and Sunil Garg says, "We remain constructive on Indian equities as we go into 2013."

The report also says that JPMorgan is underweight on China due to concerns over profits because production in China is growing faster than demand.

As many as 950 companies registered with China's Shanghai Composite Index reported an average decline of 1.9 per cent in third-quarter net income year-on-year. On the other hand, India's Sensex rallied more than any other benchmark measures for Brazil, Russia as well as China.

The Bombay Stock Exchange (BSE) India Sensitive Index (Sensex) gained 18 per cent this year, thanks to foreign fund flows and government policy measures such as opening of retail and aviation sectors to foreign investors.

JPMorgan lowered Taiwan, South Korea and Singapore to underweight; while also overweight on the Philippines because the country's soaring consumption, and on Thailand as this country is enjoying strong domestic demand and low rates of interest rates.