Since the outbreak of the coronavirus pandemic, India and Japan have reigned supreme among major Asian stock markets. Even before the virus outbreak, Indian stocks were on a remarkable rally, supported by the country’s rapid growth and strong corporate profits. Since 2014, the Nifty 50, one of India’s major stock indexes, has soared nearly 300 percent. Japan’s stock market’s meteoric rise is even more remarkable given that it took more than 30 years for Japan’s two major stock indexes to surpass the levels they reached. Just before the asset bubble burst in the late 1980s. The combination of the end of decades of deflation, widespread corporate governance reform, and political and policy stability convinced many fund managers that the rise in stock prices was built on a solid foundation. India and Japan also benefited from the deterioration in sentiment towards Asia’s largest economy. The restructuring of global supply chains and China’s cyclical and structural recession have been a boon for both countries’ stock markets, but the two Asia-ex-China trade linchpins have seen their bright spots shine in the past few months. lost some of it. Several factors come into play. Most importantly, the Chinese government announced a sweeping economic stimulus package in late September, with policymakers increasingly concerned about the severity of the economic downturn and prepared to take action on multiple fronts to revive growth. It sent a strong signal that there is.
The facts speak for themselves. In September alone, foreign investors bought a net $20 billion in Chinese securities, the largest monthly inflow since 2021. The CSI300 index, made up of Shanghai and Shenzhen listed stocks, has entered a bull market, rising 23% since September 13th. Emerging market funds are overweight in Chinese stocks for the first time in 10 months, while holdings in Asian funds have risen to a five-year high, according to HSBC data.
