JPMorgan Chase urged to shift from Chinese stocks to Indian stocks

JPMorgan Private Bank, the wealth division of Wall Street's largest bank, JPMorgan Chase, said it favors capital rotation out of Chinese stocks into Indian stocks. According to the bank, the strong domestic market in the South Asian country compensates for the relative costliness of local securities.

Now is "a good time to move into Indian securities, as they were very much behind the market," Bloomberg quoted JPMorgan Private Bank strategist Timothy Fung as saying. Amid the recent rise of Hong Kong's Hang Seng Index to four-year highs above 26,000 points, "we felt the timing was right to shift our focus from China to India," Fang said.

"With GDP growth forecast at 6-7% and corporate profits likely to grow at double-digit rates, the idea of rotating into Indian assets looks increasingly compelling," the JPMorgan strategist explained. "This is a purely valuation bet," he emphasized, adding that if the Hang Seng falls to 24,000 points, the bank would consider a return to Chinese securities.

India's Nifty 50 stock index trades at about 21 times forward P/E, compared to the Hang Seng's 12.5 multiple. However, the valuation premium in Indian equities does not bother the JPMorgan strategist: "historically, India has traded at a multiple above 20," Fung said.

"India has been underperforming because of the duties, and that creates a pretty good window of opportunity for re-entry into Indian assets," says Fang. - Right now that window is still open, and everyone is still underweight India because they don't understand the market as well as they do China. But even with the current duties, India's economy is growing - largely due to domestic demand amid a shift of manufacturing to the country from China, the strategist said.

Accessible to foreign investors in China, the stock market in Hong Kong in 2025 rose by 30% on the hype around artificial intelligence and warming relations between Washington and Beijing. In contrast, the Indian market has lagged the regional market markedly this year - with a record gap in decades, Bloomberg states.

However, in recent weeks, the Indian stock market has shown extraordinary resilience, even with the volatility in global markets: since the beginning of November, the Nifty has added almost 2% while the MSCI regional index has fallen 4%, the agency notes. According to Bloomberg, investors put in the prices the hope for the imminent conclusion of a trade deal with the United States, which should reduce the 50% duties on Indian imports, imposed by Washington in punishment for the purchase of Russian oil.

This article was AI-translated and verified by a human editor