India has surpassed China in attracting significant global capital inflows as global equity markets bounced back in April following a decline in March, as per a report by Quant Mutual Fund. The recovery in global markets was fueled by reduced geopolitical tensions and enhanced investor confidence. India’s nominal GDP growth continues to exceed that of China, establishing it as a favored destination for international investors.
The report highlights that the recent downturn in Indian equities, especially in the small-cap sector, seems to have mostly concluded, with anticipated improvements in corporate earnings expected to drive further growth. India’s stable fiscal and monetary environment, coupled with favorable liquidity conditions, are poised to facilitate credit expansion and bolster the financial services sector.
This period could offer an advantageous entry opportunity for investors, with a focus on large-cap stocks and selective exposure to mid- and small-cap segments. Key sectors of interest include energy, infrastructure, financials, telecom, pharmaceuticals, and data centers, while manufacturing is underweight due to input cost and supply chain issues.
On the global scale, the US Federal Reserve maintained unchanged interest rates. US equities surged approximately 9% in the month, with the Nifty index outperforming most major markets by gaining 6.7%. China’s Shanghai index rose by 5.6%, and Japan’s Nikkei 225 saw a significant 11.6% increase.
A ceasefire agreement involving the US, Israel, and Iran on April 8, subsequently extended indefinitely, contributed to stabilizing sentiment, despite the ongoing US naval blockade of Iranian ports, as per the report. In commodity markets, gold and silver prices experienced declines of nearly 4% in April, while Brent crude oil prices rose by about 8%.
From February 27 to April 30, the Nifty index dropped by 1,181 points or 4.7%, from 25,178.65 to 23,997.55. However, in April alone, the index surged by nearly 1,318 points, representing a growth of around 6%, climbing from 22,679.40 to 23,997.55.
