From Investing.com: 2024-11-11 03:30:52

Global investors are finding safety in India’s financial markets amid uncertainty over Trump’s policies. India’s strong economic growth, limited exposure to China and the U.S., and robust local appetite for equities make it an appealing destination. Indian stocks are also supported by strong domestic buying due to limited reliance on exports.

China faces risk with Trump threatening tariffs on Chinese imports. India is seen as better positioned than Korea and Taiwan to cope with the fallout. Despite recent pivots to Chinese stocks, investors are reverting back to India due to its safe haven status and potential for supply chain diversification.

Foreign investors pulled out $11.2 billion from Indian equities in October, but domestic institutional investors purchased a record $12.7 billion, limiting the benchmark indexes’ decline. India’s GDP growth has improved since the last Trump presidency, but high valuations remain a concern for global investors.

Vontobel Asset Management is cautious on Indian equities but bullish on sovereign bonds and the rupee as a carry trade currency. Indian government bonds offer diversification, with the rupee presenting a unique opportunity due to its uncorrelated nature and high beta to the dollar.

The rupee hit a record low after Trump’s comeback in the U.S. elections, but its decline was muted compared to regional peers. The central bank’s FX policy of stabilization and inclusion in global bond indices make the rupee an attractive asset for investors.



Read more at Investing.com: Investors see safety in India as Trump win casts shadow on emerging markets By Reuters