In the past four and a half years, a cumulative increase in the major stock index in emerging markets has even exceeded all developed market stock indexes, and it is the world, which is India.इंदौर स्टॉक
According to Wind data, from the beginning of April 2020 to the end of September 2024, the cumulative increase in the Indian Mumbai Sensex30 index reached 186.1%, far exceeding the increase in major stock indexes in the US stock indexes, S & P 500 and many major European markets in Europe.
Picture source: wind
However, since October, the Mumbai Sensex Index has fallen by 2.94%.With the market's concerns about India's economic growth, the Indian stock market has sold sharply.From September 30th to October 4th, foreign capital sold about $ 4.5 billion in Indian stocks, which is the largest sales of the Indian stock market in history.Preliminary data released by the Indian State Exchange on October 15 shows that from October 1st to 14th this year, foreign capital has sold a total of 621.26 billion Indian rupees (about 7.4 billion U.S. dollars).
For a while, the discussion of "the world's most bull stock market" was very arrogant.Under such a large selling, foreign institutions including foreign institutions, including, have expressed their views, saying that the Indian stock market will face a number of short -term risks such as high valuation, monetary fiscal policy, and slowing economic growth.Asian quantitative strategist at the Bernstein Societe Generale Group said that the Indian market seems to be "a record high in the relative valuation of India and emerging markets, which is quite fragile in the short term."
However, the views of Indian local brokers are still optimistic.In an interview with the "Daily Economic News" reporter Mehta Equits, senior vice president of MEHTA EQUITIES, said, "We still believe that foreign capital will return to the Indian stock market because investors will eventually realize that India will eventually recognize India compared with other emerging markets.Advantages and advantages, and re -invest and follow the Indian market.
14 days before October, foreign investment sold 7.4 billion US dollars in Indian stocks
According to foreign media reports, as of late September, foreign institutional investors, including stock funds, held a record high of about $ 116 billion in anchor index and options and futures of multiple stocks and single stocks.On the whole, the bullish configuration of foreign investment in Indian stock market derivatives has reached a new high since 2015.
Thanks to the rapid trend of the Indian stock market, as of the end of September, its weights in the MSCI emerging market index continued to rise to 22.14%, ranking first among the economic weight of each emerging market economy.Ridham Desai, an Indian investment strategist, wrote in the customer report on September 4: "The rising weight in the index may be caused by the prosperity of the Indian stock market. Of course, this may also benefit from the improvement of free circulation stocks in the Indian stock market and improvement.The basic factors such as the improvement of the relative income of listed companies. "
However, preliminary data released by the Indian State Exchange on October 15 showed that on October 14th, foreign investment sold 37.316 billion Indian rupees and sold it on the 11th consecutive day. From October 1st to 14th this yearA total of 6212.26 billion Indian Remnoteor (about 7.4 billion US dollars) has been sold.
Data from the Indian Trading Commission also show that the first week of October (September 30th to October 4), the Indian stock market encountered the largest net sales since January 1, 1999.stock.On October 3rd alone, foreign capital sold India stocks of 1.85 billion U.S. dollars, setting the highest record.On the same day, the Global Fund also sold $ 1.01.7 billion in Indian bonds.
On this week, the India's Nifty Index fell 4.5%, the worst weekly performance since June 2022, and continued to fall from the highest level of history (26216.05 points) and in the founding of September 26th.History high (26277.35 points).
Brandt, head of the global capital flow to monitoring agency EPFR research, said that since last year, the average funds flowing into Indian stocks per week were between 400 million to 500 million US dollars.As of the week of October 2nd, foreign capital flowing into the Indian stock market fell to $ 101 million. This number has decreased significantly compared with the average level of the past year.
Indian economy "stall"
The back of the Indian stock market on the back of the foreign investment is that the market's expectations for the Indian economy are constantly deteriorating.After experiencing high -speed growth in recent years, India's economy seems to be losing motivation.
In September of this year, the indicator of India's economic health -the tax growth of goods and service tax fell to the minimum level of more than three years, and car sales as consumer indicators also fell sharply by 19%year -on -year.In the previous month, an index that tracked eight core industries such as coal, petroleum, and electricity appeared for the first time in more than three years.
In addition, data recently released by the Indian Bureau of Statistics show that in the first quarter of fiscal year 2024/25 (April 2024 to June 2024), India's GDP (GDP) increased from 7.8%in the previous quarterSlowly to 6.7%, the minimum increase in five quarters, which is also a significant slower compared to 8.2%in the same period last year.नागपुर निवेश
Foreign media said that if the conflict of conflicts in the Middle East is upgraded, oil prices continue to rise, and the situation may become worse.More than 85%of oil consumption from India comes from imports, which makes the country vulnerable to the impact of oil prices.It is estimated that every time the price of oil rises is $ 10/barrel, India's GDP will decrease by 0.4%.The increase in fuel subsidies will also occupy other government expenditures.
But last week, Indian Prime Minister Modi delivered a speech at a meeting of Indian economy, as always, optimistic about India's prospects.He believes that the world is experiencing a "Indian era".He said that the rapidly growing, favorable population structure and the emerging technology industry have made India in a "best position."
Regarding the expectations of the Indian economy in the future, India's wealth management agency Mehta Equities Senior Vice President Prashanth Tapse acknowledged in an interview with the reporter of the Daily Economic News that although India's expected economic growth rate of this fiscal year is 6%~ 7%, it is facingGlobal challenges such as conflict and geopolitical tensions.
Many investment bank warning short -term risks
(Morningstar) Analyst Prashant Srivastava said that geopolitical tensions have continued to upgrade, crude oil prices have risen sharply, and the Indian market performance has improved. At present, valuations are more attractive. They are the main reasons why foreign capital withdrawn from the Indian stock market in the near future.
It is believed that the high valuation and currency fiscal policy of the Indian stock market will be turned. The lattering of the Indian economy has slowed down in the last quarter, which may become the main risk of the Indian stock market in the short term.
The bank said that India's latest quarterly economic growth has slowed down, not only the first time in India's economic growth since the new crown epidemic, but also occurred at the time of Indian currency and fiscal policy.If this situation continues, the economic slowdown may become the main risk of the stock market.At the same time, the bank also saw the political risks of India, that is, "Although Modi was successful, the governing alliance he led lost a majority of parliamentary seats.Stepping on welfare expenditure.The peak return is more than 10%.
The Asian quantitative strategist of Bernestein Group also reduces the rating of the Indian stock market due to valuations. At the same time, it is expected that the Indian stock market will rise further under the policy boost.The group's quantitative strategist Rupal Agarwal and Cheng ZHANG wrote in a report on October 10 that the Indian market seems to be "the relative valuation of India and emerging markets hit a record high in the short term".
In the report of last Thursday (October 10), the bank lowered its rating of the Indian stock market from "neutral" to "reducing holdings" because foreign capital was expected to continue to withdraw, and Indian companies' profitable profit was weak.
Bloomberg reported that after India introduced a number of stimulus measures, the Indian stock market rose sharply at the end of September, which led to many funds to withdraw funds from other Asian markets.Nevertheless, Indian stocks are still one of the highest valuations in the world. The MSCI India Index's one -year price -earnings ratio is 24 times, which is more than twice the index valuation.
The data compiled by Bloomberg also shows that the Indian Nifty Index's component stocks are expected to have a price -earnings ratio of 22 times a year, which is the highest in the Asian market and a premium of up to 35%from its historical average.So far this year (as of last Thursday), the cumulative investment of global funds in the Indian stock market has reached US $ 8.739 billion.
Indian local securities firms are optimistic and firmly believe that foreign capital will "return"
In the case of a lot of foreign -funded institutions, Indian brokers are still optimistic.
In an interview with the reporter of "Daily Economic News", Prashanth Tapse said, "Recently foreign capital withdrew from India and flowed into the Indian market.Foreign capital will return to the Indian stock market, because investors will eventually recognize India's advantages and advantages compared with other emerging markets, and re -invest and pay attention to the Indian market.
He pointed out that India today is very different from 5 years ago, and the Indian market is now promoted by domestic institutions and retail funds.He believes, "Therefore, any selling of foreign investors, as we saw in October 2024, is just a short -term impact."
"I believe that with the growth of India's economy, serious foreign capital will continue to stay in India. From October 1st to October 14th, foreign investment sells 621.26 billion rupees of Indian stocks.Indian stocks of 600.7 billion rupees have been almost the same.Add to reporters.
Photo source: Bloomberg
In Prashanth Tapse, the plunge in the Indian stock market since October has provided investors with an opportunity for "low suction".
He pointed out to each reporter, "In the past 12 months, India has been the best market for" buying "in emerging markets. The recent plunge has also provided it for companies with low suction and even strong fundamentals.Although India has recently plummeted, its transaction volume is still higher than that of other emerging markets, because India still attracts a lot of funds around the world.
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