Investor interest in Indian equities continues to reach a fever pitch. As such, Indian stocks have hit a record high in terms of occupancy in the MSCI Global Standard index.
The country is hot on the heels of the second-largest economy in terms of weight on said index. China continues to struggle with economic growth as it looks to continue recovering from a real estate development crisis in 2021.
“India’s weight in MSCI’s Global Standard index, which tracks emerging market stocks, has risen to another record high, boosting prospects of more inflows into its equity markets,” confirmed a Reuters report. “With this, India has further narrowed the gap with China on the index.”
“While China’s weightage in the index will fall to 25% from 25.4%, India’s weight will rise to 19% from 18.2%,” the report added.
In the meantime, investors have taken well to India and the country could potentially even overtake China if its current growth trajectory persists. It’s not just Indian equities that are seeing interest, but also the country’s bonds.
According to economists, India’s expansive growth wasn’t something on the horizon over a decade ago. Continued growth could continue drawing in foreign investment and thus, boost its economy even further.
“Ten years ago, no one would have given this question much thought. But times are changing,” wrote Alicia Garcia-Herrero, chief economist for Asia-Pacific at investment bank Natixis in Hong Kong. “The Chinese economy may now be more than five times larger than India’s, but India is growing much faster than China, and no one expects that to change anytime soon.”
Leverage Strength in Indian Equities
Traders who want to leverage the strength in Indian equities can do so using the Direxion Daily MSCI India Bull 2x ETF (INDL). The fund seeks daily investment results equal to 200% of the performance of the MSCI India Index. That index measures the performance of the large- and mid-cap segments of India’s equity market. It covers approximately 85% of companies in India’s equity universe.
Additionally, having that diversification component inherent in INDL can help capture that added mid-cap growth while large-cap companies continue to fuel gains in the current economic environment. Once large caps hit a peak, midcap companies can continue the rally and at times, can make more pronounced moves versus large caps.
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