By Netty Ismail, Chiranjivi Chakraborty and Ashutosh Joshi
A record stock-market valuation and surging foreign inflows make for a great backdrop as Prime Minister Narendra Modi looks to tout India’s growing prominence to world leaders at this weekend’s Group of 20 summit in New Delhi.
Boosted by one of the world’s fastest growing economies, solid corporate earnings and an unprecedented retail investing boom, the nation’s equity benchmark is also approaching an all-time high.
The milestones are a stark contrast to many emerging-market peers, not least to neighboring China, whose economic woes and struggling financial markets have become a source of frustration for global investors. In fact, troubles at its biggest EM rival have only burnished India’s appeal. Developing-market money managers are now most overweight on India in their Asia portfolios as a “safe place to hide,” while China ranks among their largest underweights, Goldman Sachs Group Inc. analysts wrote in a report earlier this month.
“Strong domestic growth prospects, ongoing policy reforms as well as robust credit growth are tailwinds contributing to the outperformance of Indian equities,” said Audrey Goh, investment strategist at Standard Chartered Bank SG Ltd. “The shift to a multi-polar world would also likely benefit India,” with the government moving to make doing business in India more attractive.
India’s stock market hit an all-time high valuation of $3.8 trillion this week, a perfectly timed billboard for Modi as the G-20 summit gives him another opportunity to showcase the nation’s potential as a geopolitical juggernaut. With the West looking to curb China’s influence, Modi has rolled out a mix of tariffs and incentives to lure companies to make in India and firms including Apple Inc. and Samsung Electronics Co. are among those expanding production in the nation.
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