1. Chinese tech breakthrough boosts sentiment for Chinese equities; Indian stocks lag behind. 2. MSCI China index up over 26% from January lows; MSCI India down over 7% YTD. 3. Rotation from India to China fuels investor flow shifts; India faces economic slowdown.
Investor funds are shifting from India to China following tech breakthroughs, reducing demand for INDA. Similar market rotations in emerging economies have historically led to depressed index performance.
The article highlights significant fund rotations away from India amid a slowdown and weak earnings outlook, suggesting a strong near-term effect on INDA. This is underlined by the sharp decline in performance relative to Chinese equities.
Immediate re-allocation of funds based on current sentiment can quickly impact prices. Past short-term corrections due to fund flow shifts support this view.