India’s stock market reached an all-time high this month as robust economic growth, financial reforms and a pro-business government have drawn greater interest from global fund managers.
The Nifty 50 is up 7 per cent this year, compared with MSCI’s broad index tracking emerging market stocks in local currency, which is down 16 per cent. The equity benchmark’s new peak at the start of this month comes as multinational companies increasingly turn to India as an alternative to China for international expansion and to gain access to a fast expanding group of middle-income consumers.
Supply chain disruptions in China due to Beijing’s strict zero-Covid policy have boosted India’s appeal to global businesses. Apple, for example, warned last month that shipments of its new iPhone 14 would be lower than anticipated as China’s Covid restrictions interrupted its primary assembly facility in Zhengzhou. The company is expected to shift 5 per cent of its iPhone 14 production to India this year and a quarter of all iPhones could be made in India as early as 2025, according to JPMorgan.