India has emerged as an investor favorite, aided by solid earnings and a booming consumer market as the Indian stocks are trading near their most expensive levels against battered Chinese peers.
As per the data compiled by Bloomberg, the Indian stocks are underscoring a growing divergence in investor preference between the two emerging market leaders.
The MSCI India Index trades at a 157% premium over the China gauge on valuations based on forward earnings estimates, just 3% points short of the record reached in October 2022, the data said.
India’s ascent came on the back of a sluggish Chinese market, where problems ranging from rivalry with the US and deflationary pressures led to a third annual decline in the MSCI China gauge. The Indian measure has continued to advance following a fifth year of gains.
According to the data, India is now trading at 22 times forward earnings estimates, higher than a year ago, while the metric for China stands at 8.6 following a steady decline.
The gap demonstrates how investors favor India, with its improving profit prospects, despite China’s extraordinarily cheap valuations, it said.
In a separate development, data analysed by brokerage Motilal Oswal said the total number of demat accounts in December increased to 139 million while new account additions surged to 4.2 million.
The average monthly additions have been around 2.1 million in FY23 at 50% compared to the previous month, which witnessed 2.8 million new demat accounts.