India outpaces China, draws strong global inflows — Report

NEW DELHI — India has outperformed China in attracting strong global capital flows even as global equity markets rebounded in April after a decline in March, according to a report.

According to an analysis of Quant Mutual Fund, the recovery in global markets was driven by easing geopolitical tensions and improved investor sentiment. The report noted that India’s nominal GDP growth continues to outpace China's, positioning it as a preferred destination for global investors.

It added that the recent correction in Indian equities, particularly in the small-cap segment, appears to have largely run its course, with improving corporate earnings expected to support further growth.

India’s stable fiscal and monetary environment, along with supportive liquidity conditions, is likely to aid credit expansion and strengthen the outlook for financial services.

The current phase could present a favourable entry point for investors, with portfolios tilted towards large-cap stocks and selective exposure to mid- and small-cap segments.

Preferred sectors include energy, infrastructure, financials, telecom, pharmaceuticals, and data centres, while manufacturing remains underweight due to input cost and supply chain concerns.

On the global front, the US Federal Reserve kept interest rates unchanged.

US equities rose about 9 per cent during the month, while Nifty gained 6.7 per cent, outperforming most major markets. China’s Shanghai index rose 5.6 per cent, while Japan’s Nikkei 225 surged 11.6 per cent.

A ceasefire agreement involving the US, Israel and Iran on April 8, later extended indefinitely, helped stabilise sentiment, although a US naval blockade of Iranian ports remained in place, the report said.

In commodities, gold and silver prices declined by up to nearly 4 per cent during April, while Brent crude rose about 8 per cent.

Between February 27 and April 30, the Nifty declined 1,181 points or 4.7 per cent, from 25,178.65 to 23,997.55.