Despite Covid cases surge, Indian stocks turn pricier vs emerging peers

Even as the coronavirus crisis in India shows few signs of abating, the relative outperformance of local stocks is making them more expensive versus their emerging-market peers.

The MSCI India Index has beaten a broader gauge of developing nation shares by about 5 percentage points in 2021 as local stimulus measures and the absence of a nationwide lockdown keep investors optimistic about a strong economic rebound. As a result, the Indian gauge’s forward price-to-earnings ratio of about 21 times is now at its highest since early January relative to that of the MSCI Emerging Markets Index, which has been weighed down by a correction in Chinese stocks and rising US bond yields.