Wall Street Jedi
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions
  • News
  • Economy
  • Editor’s Pick
  • Investing
  • Stock
No Result
View All Result
  • News
  • Economy
  • Editor’s Pick
  • Investing
  • Stock
No Result
View All Result
Wall Street Jedi
No Result
View All Result
Home Investing

Policy pivot is catalyst for rotation from India to China: CSLA

by
October 7, 2024
in Investing
0
Policy pivot is catalyst for rotation from India to China: CSLA
0
SHARES
1
VIEWS
Share on FacebookShare on Twitter

Investing.com — A shift in policy has triggered a market rotation from India to China, driven by China’s recent policy pivot, as per CLSA analysts in a note dated Monday. 

The brokerage suggests that China’s policy adjustments, including monetary easing and fiscal support, will act as a catalyst for a potential rally in Chinese equities, while Indian stocks, which have seen consistent inflows, may now face increased risk of underperformance.

The note flags that the deceleration phase in the global market cycle has been in effect, with economic growth slowing down but avoiding a sharp contraction. 

Against this backdrop, China, long considered a lagging market, now appears poised for a turnaround, as the country embarks on a policy pivot aimed at reviving growth. 

A combination of rate cuts and support for the property and stock markets has fueled optimism for a continued rally in Chinese equities.

CSLA’s Quantamental framework, which evaluates market attractiveness based on factors such as quality, yield, value, and risk, now favors China over India. 

China ranks higher on quality and yield, with Chinese stocks appearing relatively cheaper and less risky compared to Indian equities. 

As per the brokerage, China’s previous underperformance was largely due to its growth slowdown, which was already priced in, but improvements in key metrics such as quality and yield were not fully recognized. This has now started to change.

The analysts mention that the sentiment reversal surrounding China could drive foreign inflows, potentially drawing as much as $120 billion in funds, a movement that poses a direct challenge to India. 

India, which has benefited from substantial foreign investment in recent years, particularly in 2024, is seen as vulnerable to outflows as global funds seek opportunities in China.

Moreover, CLSA points out that India’s valuations have become stretched, leaving it more exposed. 

While Indian equities have benefited from high inflows, particularly from domestic retail investors, the market faces risks from rising oil prices, potential disruptions due to large-scale IPOs, and recent regulatory changes aimed at curbing retail trading in derivatives. 

These factors could dampen investor sentiment and trigger a reallocation of funds away from India.

The contrast in performance expectations is stark. While Chinese equities are expected to benefit from their current policy shift, Indian stocks, despite their strong recent performance, are likely to experience a phase of underperformance relative to China. 

Historically, when India has underperformed China, the duration has averaged about 3.9 months with a decline of 13%, while Chinese equities surged during the same periods.

CLSA suggests that investors seeking shelter during this anticipated phase of Indian underperformance should focus on high-quality, yield-generating stocks within India, and be wary of those with high risk and growth potential, which may underperform in the short term.

This post appeared first on investing.com
Previous Post

Goldman Sachs cuts odds of US recession to 15% after upbeat jobs report

Next Post

Japan PM Ishiba rules out hike in capital gains tax

Next Post
Japan PM Ishiba rules out hike in capital gains tax

Japan PM Ishiba rules out hike in capital gains tax

  • Trending
  • Comments
  • Latest
American creating deepfakes targeting Harris works with Russian intel, documents show

American creating deepfakes targeting Harris works with Russian intel, documents show

October 23, 2024
Cadence raises midpoint of 2024 profit forecast on robust demand from chip designers

Cadence raises midpoint of 2024 profit forecast on robust demand from chip designers

October 28, 2024
Israel stocks lower at close of trade; TA 35 down 0.23%

Israel stocks lower at close of trade; TA 35 down 0.23%

October 6, 2024
Earnings call: Microsoft sees soaring cloud and AI growth in Q1 FY2025

Earnings call: Microsoft sees soaring cloud and AI growth in Q1 FY2025

October 31, 2024
Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

0
Retailers scramble to move billions in cargo as East Coast dockworkers prepare to strike

Retailers scramble to move billions in cargo as East Coast dockworkers prepare to strike

0
PepsiCo to buy tortilla chip maker Siete Foods for $1.2 billion

PepsiCo to buy tortilla chip maker Siete Foods for $1.2 billion

0
East and Gulf coast ports shut down as thousands of workers go on strike

East and Gulf coast ports shut down as thousands of workers go on strike

0
Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

June 15, 2025
Howard Schultz says he ‘did a cartwheel’ when Starbucks CEO Niccol coined ‘back to Starbucks’ strategy

Howard Schultz says he ‘did a cartwheel’ when Starbucks CEO Niccol coined ‘back to Starbucks’ strategy

June 12, 2025
U.S. online stores put up ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

U.S. online stores put up ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

June 12, 2025
U.S. online stores put ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

U.S. online stores put ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

June 11, 2025

Recent News

Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

Trump says national security concerns in Nippon-U.S. Steel deal can be resolved

June 15, 2025
Howard Schultz says he ‘did a cartwheel’ when Starbucks CEO Niccol coined ‘back to Starbucks’ strategy

Howard Schultz says he ‘did a cartwheel’ when Starbucks CEO Niccol coined ‘back to Starbucks’ strategy

June 12, 2025
U.S. online stores put up ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

U.S. online stores put up ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

June 12, 2025
U.S. online stores put ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

U.S. online stores put ‘out of stock’ signs as Nintendo Switch 2 sales hit record highs

June 11, 2025

Disclaimer: WallStreetJedi.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2025 wallstreetjedi.com | All Rights Reserved

No Result
View All Result
  • News
  • Economy
  • Editor’s Pick
  • Investing
  • Stock

Copyright © 2025 wallstreetjedi.com | All Rights Reserved