From BNN Bloomberg: 2024-05-17 00:58:40

Indian stocks are facing the biggest monthly outflow in nearly a year due to election uncertainties and high valuations. Global investors have pulled $3.5 billion from India’s stock markets this month, the largest withdrawal since June 2023. Cheaper Chinese equities are becoming more attractive amidst concerns about India’s economic reforms.

Prime Minister Narendra Modi is expected to secure a third term despite uncertainty. Citigroup downgraded China’s equities to neutral and upgraded India to overweight, highlighting differing earnings outlooks. Despite China’s rally, its stocks trade at half the valuation of Indian stocks. Investors, including Michael Burry and David Tepper, are increasingly turning towards Chinese technology companies.

The rotation from Indian to Chinese stocks may continue as money flows between the two emerging markets. China’s MSCI Index has overtaken India’s in year-to-date performance. Given China and India’s status as the largest markets in the EM Universe, selloffs in one country often lead to investments in the other.



Read more at BNN Bloomberg: Foreigners Sell Indian Stocks on Election Risks, China Appeal