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Compared with a year-and-a-half ago, when its economy had just begun to reopen after a devastating surge of the delta variant, India’s stock market is unchanged in dollar terms. And yet, its weight in the MSCI Emerging Markets Index has zoomed past Taiwan and South Korea to second place, with almost the entire gain coming at the expense of the gauge’s biggest constituent: China.
The world’s second-largest economy has seen equities slump by two-fifths since June 2021, thanks to Beijing’s isolationist Covid-19 policies, turmoil in the real-estate industry and a punishing antitrust campaign against the country’s valuable tech firms. If China has been mired in a surfeit of pessimism, the opposite is true of India. Thanks to pent-up urban demand after the pandemic, stocks have held up reasonably well despite the US Federal Reserve’s aggressive monetary tightening.
As a result,…
