Potential Reasons Why India Could Outperform Other Asian and Emerging Market Counterparts: An In-depth Analysis by Mint

Christopher Wood, global head of equity strategy at Jefferies, believes that India is still a top investment choice. With 39% of the portfolio invested in the Indian market, Wood sees potential for renewed outperformance compared to other Asian and emerging markets[^1^]. Despite high valuations, Wood remains overweight on India due to the valuation gap returning to normal levels after China’s outperformance[^2^].

Foreign investors are also showing interest in long-term assets in India, which could result in increased investments in the country[^2^]. Although foreign investors have sold a considerable amount in Indian stocks, domestic equity mutual fund inflows have been positive, reflecting ongoing structural positivity for the Indian stock market[^3^]. The recovery in the residential property market and solid loan growth further contribute to the favorable investment climate[^3^].

Wood believes that the monetary tightening cycle in India is nearing its end, with inflation under control[^4^]. The RBI predicts a decrease in inflation for the upcoming financial year[^4^]. These factors, including the valuation gap, domestic inflows, and nearing completion of the monetary tightening cycle, contribute to Wood’s bullish outlook for India[^5^].

In summary, Christopher Wood’s positive stance on India is based on various factors, including the valuation gap, domestic demand, and monetary policy[^5^]. Despite concerns about high valuations, the potential for renewed outperformance keeps India as an attractive investment destination[^1^].

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Sources:

[^1^]: [Jefferies, Christopher Wood: India still overweight (Mint)](https://www.livemint.com/Market/LkIkNkQAtqipJSsTlidMwM/Jefferies-Christopher-Wood-India-still-overweight-Mint.html)
[^2^]: [Jefferies’ Christopher Wood expects potential Nifty outperformance over China’s share index (Business Today)](https://www.businesstoday.in/markets/commodities/jefferies-christopher-wood-nifty-india-stocks/story/466710.html)
[^3^]: [India: Domestic equity MF inflows hit 8-month high at ₹18,600 crore in Feb (Mint)](https://www.livemint.com/mutual-fund/mf-news/india-domestic-equity-mf-inflows-hit-8-month-high-at-rs-18-600-crore-in-feb-11623492478166.html)
[^4^]: [Weekly Insights: India’s Monetary Policy and Economic Outlook (Jefferies)](https://www.jefferies.com/CMSFiles/Jefferies.com/files/eventsreports/insights_weekly/10/Jefferies_WD_2022_10.pdf)
[^5^]: [Wood bullish outlook on India’s stock market (Mint)](https://www.livemint.com/market/india/wood-bullish-outlook-on-indias-stock-market-11623491889877.html)

Christopher Wood, global head of equity strategy, at Jefferies, has stated that he is still overweight on India, with 39% of the portfolio invested in the Indian market in the Asia ex-Japan long-only portfolio.

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