MUMBAI: India’s stock market is reaping the benefits as investors divert billions of dollars away from China, amid its slowing economy, towards the South Asian giant.
The trend of China’s economic slowdown is likely to persist in the coming years, as the country struggles with sagging productivity and a rapidly ageing population, the International Monetary Fund (IMF) said earlier this month.
Meanwhile, India’s economic growth, large population, and policy reforms are all factors that are driving cash into its equity markets, according to market analysts.
Potential risks still remain, however, including the outcome of India’s general election this year and the broader geopolitical landscape.
Analysts are widely expecting India’s benchmark Sensex and Nifty indices, which include the country’s largest and most actively traded stocks, to continue rising this year with a double-digit percentage increase.
Sectors across the board are poised to perform well, including those seen as having been overvalued, such as public sector banks and power companies, said analysts.
These could benefit from the government’s budget for the next financial year presented at the start of February, which would increase spending in areas such as infrastructure.