How much will the stock market fall due to China? How much foreign investment can go out

India vs China Stock Market: Due to China, there is a state of confusion in the stock market at this time. Investors and market experts are trying to understand how much money can go out of the Indian stock market and go to the Chinese stock market.

And how much can fall due to this sell-off? But do investors really need to be afraid in this whole matter? Is the boom in China's stock market a loss deal for India? Let's know-

First of all, let us know why the Chinese stock market is booming? China has announced its biggest relief package after Covid to revive its sluggish economy. In particular, it has taken several major steps to end the crisis in its property market that has been going on for years. Due to this, Chinese stocks saw the biggest boom in almost a decade last month. But the question is, is this boom so sustainable that due to this foreign investment will shift from India to China?

Goldman Sachs analyst Sunil Kaul believes that this is unlikely. Sunil Kaul said that China's recent move has given some confidence to investors, but there are still many challenges in China's economy. In such a situation, it remains to be seen whether the rally in the stock market there will last for a long time.

He said that China's stock market was not running for a long time, so its valuation is still cheaper than other emerging markets like India. Due to this, investors jumped to invest money after seeing a big announcement from there. But how much impact these announcements will have, it will be known when the economic data comes after a few months. For now, this is just a tactical rally and should not be seen as a long bull run.

Even if there is a boom, is there really any loss to the Indian stock market? Let us understand this as well. Historical data shows that the boom in China has not had any significant impact on the Indian market. For example, when Chinese stocks rose 30% in early 2024, India saw foreign selling of only $1 billion and the Nifty 50 rose 10% at the same time. Similarly, when China reopened its economy after COVID-19 in late 2022, the Indian market recovered within a few months.

In any case, the influence of foreign investors in the Indian stock market has decreased in recent times and domestic investors have emerged as a major force in the Indian stock market. Mutual funds and other domestic institutional investors are constantly keeping the Indian market up.

In addition, the share of foreign investors in India is now at an 11-year low. This means that foreign investors are still not investing much in India, and in such a situation the Indian market is less likely to fall. India's share in the MSCI EM index has also increased to 20% in recent months.

On the other hand, China's economy is facing problems like slow growth and aging population. There are serious problems in their property sector as well. In such a situation, it is very unlikely that foreign investors will completely leave India and move towards China.

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