Is China Stealing Dalal Street’s Diwali Sparkle?

Aakhir Tak – In Shorts:

1. Foreign investors withdrew over $10 billion from India in October 2024.
2. China’s stimulus plans attracted global investors, sparking an exodus from India.
3. Domestic investors helped balance the foreign outflow, maintaining market stability.

Aakhir Tak – In Depth:

As the festive season approaches, foreign investors are turning their backs on India’s stock market and heading towards China. In October 2024, a record $10 billion (approximately ₹84,000 crores) has been pulled from Indian equities. The main reason cited is China’s newly announced stimulus plans, which have caught the attention of global investors.

China’s economic revitalization through monetary easing and increased government spending has created a favorable investment climate. In October, around billion of foreign money flowed into the Chinese stock market, while investments in India saw a significant outflow. Financial experts are dubbing this trend the “Buy China, Sell India” narrative.

Despite the exodus of foreign investors, India’s domestic investors have stepped in to support the stock market. In October alone, domestic institutional investors bought nearly $8 billion worth of shares. This has countered the foreign selling spree, ensuring that market volatility remains minimal.

Experts believe this is a short-term trend, and India’s long-term investment prospects remain robust. India’s economic growth is outpacing China’s, and with strong infrastructure and ongoing economic reforms, foreign investors are expected to continue betting on India’s long-term growth story.

Aakhir Tak Editor-in-Chief

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