Home NewsStock Market News Domestic demand rebounded + foreign capital returned to emerging Asian stocks, these two stock markets bucked the trend and strengthened | Anue Juheng – Eurasian shares

Domestic demand rebounded + foreign capital returned to emerging Asian stocks, these two stock markets bucked the trend and strengthened | Anue Juheng – Eurasian shares

by WOOWinvest
0 comment
Domestic demand rebounded + foreign capital returned to emerging Asian stocks, these two stock markets bucked the trend and strengthened | Anue Juheng – Eurasian shares


Benefiting from the rebound in demand in the post-pandemic era, slowing growth in China and the return of foreign capital, Indonesian and Indian stock markets have been able to shake off the sluggish atmosphere of the entire regional market and become the two best performing markets among emerging Asian economies this year.

The Jakarta Composite Index has risen nearly 8% so far this year, leading the world, while India’s Nifty 50 has surged 10% in the past month alone, flat year-to-date but compared with the performance of the MSCI Emerging Markets Asia Index Still a clear outperform, the latter is down 19% so far this year.

Slowing growth in China and overall economic risks are common reasons why investors prefer both markets. Individually, the return of foreign capital is a key factor in supporting the strength of India’s stock market, which provides momentum for an unprecedented boom in retail investment, while Indonesia’s economic growth is driven by commodity exports while the central bank maintains an ultra-low interest rate policy.

Suppressed by a strong dollar and rising global interest rates, technology-intensive markets such as Taiwan and South Korea have been hit hard this year, and mainland stocks have not yet bottomed out. The overall performance lagged behind the European and American stock markets, and the resilience of the Indonesian and Indian markets was particularly prominent.

“I would be surprised if neither country’s benchmark indices outperform from here, whether in local currency or in US dollars,” said Vikas Pershad, portfolio manager at M&G Investments.

Goldman Sachs strategists also released a report this week, saying India and Indonesia are the only two markets in Asia that are “insulated” from China, as they have shown a negative correlation with the monthly returns of the MSCI China Index over the past two years.

In addition, for the first time in the past few weeks, India’s net foreign capital inflow has turned positive, indicating that the local market development trend has turned stronger. However, with the Reserve Bank of India raising interest rates by 2 yards on Friday, the central bank’s hawkish stance and inflationary pressures remain two major headwinds.

Notably, the Indonesian economy appears to be in the sweet spot, with core inflation currently below 3%, giving the central bank more time to maintain its low interest rate policy. In addition, thanks to the strong economic growth in the last quarter, Indonesia’s net foreign capital inflow this year was as high as 3.8 billion US dollars, ranking first among developing markets in Asia.

You may also like

Leave a Comment

Our Mission is to help you make better trading decisions by providing actionable investing content, comprehensive tools, educational resources and assist you in making more money in the stock market.

Latest News

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2022 – All Right Reserved. Designed and Developed by WOOW Invest

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy