Foreign Investors Flee India: A Bull Run in China's Stock Market

Global investors are selling Indian stocks, shifting investment to China's market due to stimulative policies and potential economic recovery. High inflation and interest rates have impacted Indian stock value, while China's favorable conditions attract capital. Asset managers like Morgan Stanley reduce India's exposure, redirecting focus to China.

Global investors are withdrawing from India's stock market at an unprecedented rate, redirecting their capital towards China. This marks a significant shift in the investment landscape between two major Asian economies over the past six months.

The withdrawal is driven by high inflation and interest rates in India, leading to a reduction in Indian stocks' value by 13% since September's peak, resulting in a $1 trillion loss in market value. In contrast, China's promise of stimulative economic policies has reignited investor interest, with Hong Kong's Hang Seng Index surging 36% since late September.

Investment firms, including Morgan Stanley and Fidelity International, have reduced their holdings in India, favoring China amid a positive outlook. Despite the selloff, some experts believe India's strong economic fundamentals could eventually stabilize foreign investor sentiment.

(With inputs from agencies.)