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    No more a laggard, Indian stocks best MSCI EM Index

    Synopsis

    If the current momentum of fund flows continues, the country could witness the highest foreign fund inflows since 2014.

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    The consensus 12-month rolling projected earnings per share of the Nifty 50 is up 3.5 per cent at Rs 646 from Rs 624 before the tax cut announced in September.
    Global investors appear to be reversing their stance on Indian equities, after pulling out record amounts in July and August.

    They have net bought $9.9 billion of Indian equities since the beginning of the year, one of the highest among major emerging markets, according to Bloomberg. Inflows during September-October were $2.75 billion. If the current momentum of fund flows continues, the country could witness the highest foreign fund inflows since 2014.

    Indian equities have outperformed the MSCI EM index — a gauge of developing nations’ equities followed by global fund managers — by 4 per cent in the past three months, thanks to earnings upgrades following the government decision to cut corporate tax rates. The consensus 12-month rolling projected earnings per share of the Nifty 50 is up 3.5 per cent at Rs 646 from Rs 624 before the tax cut announced in September. The valuation premium of Indian equities has now climbed to 51 per cent against the long-term average of 33 per cent.
    stock-graphBloomberg

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