From Morningstar: 2024-05-09 04:56:00

Investors show confidence in Indian election outcomes as €3 billion flowed into European funds specializing in Indian equities in Q1 of 2024. Net inflows remain positive for India equity funds, expect Modi’s re-election to boost India’s growth story, as it overtakes China in economic expansion.

Modi’s victory is anticipated by market experts, who foresee political stability and continued economic growth in India. The IMF predicts India’s GDP will grow by 6.8% in 2024-25, surpassing China’s growth rate. Financial markets internationalization and favorable entrepreneurship climate make India attractive for long-term investment.

While the Indian stock market rally raises concerns of overvaluation, a Modi win could attract foreign investments through bond inclusion in international indexes. Investors should exercise caution regarding individual stock valuations. Key risks include inflationary pressures, export growth challenges, and political promises delivery post-elections.

Apple and Tesla are eyeing India as a potential market for expansion, seeking to reduce reliance on China. India’s economic growth prospects attract global companies looking to diversify supply chains. However, caution is advised for investors due to high stock valuations relative to other emerging markets, requiring selective investment strategies.



Read more at Morningstar: India Are Stocks Popular in Election Year. Are They…