Chinese and Indian stocks expected to outperform in Asia in second half of 2024

From The Edge Communications Sdn. Bhd.: 2024-07-05 21:52:42

Equities in China and India are expected to outperform in Asia in the second half of 2024, with anticipated Fed rate cuts providing tailwinds. Chinese stocks are favored for low valuations and policy changes, while Indian shares are preferred for post-election optimism and immunity to geopolitical tensions.

MSCI EM Asia Index outperformed broader MSCI Asia gauge in last quarter, with India’s equities extending rally post Modi’s re-election. Indian market value hit US$5 trillion for the first time in June, with positive sentiment driven by policy continuity and foreign investor return.

Investors remain confident in India’s equities, anticipating corporate profit growth and potential boosts from federal budget. Multiple catalysts, including government budget, are seen as yet to be priced in Indian stocks, generating confidence for further growth.

Despite recent struggles, Chinese stocks are still being viewed positively for the next six months, with improvements in global funds return and corporate earnings. HSBC Holdings plc expects sentiment in Chinese equities to slowly turn around, adding positions for 2H2024.

Geopolitical tensions around upcoming US election are flagged as a key risk for Asian markets. More restrictive policies could result from tensions between US and China, impacting entire region. Over half of respondents see Asian equities outperforming US counterparts through end of 2024, citing Fed cuts and cheap valuations.



Read more at The Edge Communications Sdn. Bhd.: Chinese, Indian stocks favoured over Japan in Asia’s 2H