Growing bets on India likely to sustain outperformance, say experts

One of the major reasons for the underperformance of EM peers is the underperformance of China, which has the biggest weight in the MSCI EM and MSCI Asia Pac ex-Japan indices

Morgan Stanley has joined global brokerages CLSA and Nomura in raising India allocations.

Experts say the growing preference for domestic equities could help the Indian bourses fare better than their emerging market (EM) peers.

Since 2021, the MSCI India index has gained 39 per cent even as the MSCI EM index declined 28 per cent. So far in calendar 2023, the India index has gained 7.4 per cent, while MSCI EM is down 2.7 per cent.

“We increase our overweight (OW) stance on Indian equities, as our most-preferred EM market. Relative economic / earnings growth is improving and the macro-stability