Chinese and Indian equities expected to outperform in Asia's second half.
From Bell Media: 2024-07-05 20:16:40
Equities in China and India are expected to outperform in Asia in the second half of the year, according to a survey of 19 Asia-based strategists and fund managers. Chinese stocks are favored for low valuations and policy changes, while Indian shares are preferred for post-election optimism and resilience to geopolitical tensions.
MSCI EM Asia Index outperformed broader MSCI Asia gauge, with EM Asia being the most bought region in June. Indian equities continue to rally after Prime Minister Modi secured support for a coalition government, pushing stock-market value over $5 trillion. Investors are confident in profit growth and upcoming federal budget support.
Investors see potential for Indian equities to accelerate by year-end due to expected corporate profit growth and support from the federal budget. Indian stocks are perceived as sheltered from US-China tensions and spillover effects from the US presidential election. Multiple catalysts, including the government’s budget, may boost Indian stocks.
Despite recent struggles, Chinese stocks are expected to perform well in the next six months, with global funds returning and corporate earnings improving. HSBC Holdings Plc is bullish on China, anticipating a shift in the negative sentiment towards Chinese equities and adding positions for the second half.
Geopolitical tensions from the upcoming US election pose a risk for Asia’s market, with more restrictive policies potentially coming as President Biden and former President Trump show their stance toward China. Respondents predict Asian equities will outperform US counterparts through 2024, fueled by Fed rate cuts and cheap valuations.
Respondents believe Asia has the potential to outperform in a Fed cutting cycle, citing higher economic growth, earnings potential, cheaper equity valuations, and higher currencies relative to the dollar in the region. Most respondents forecast gains of 10% or less in Asian equities through the end of 2024.
Read more at Bell Media: Chinese, Indian Stocks Favored Over Japan in Asia’s Second Half