India, China are winning back investors

Foreign investors are returning to Asia’s two largest emerging markets, as India and China regain favor with global fund managers.

After pulling $29 billion out of Indian equities this year, overseas investors are warming to India, thanks to easing energy prices and supportive monetary policies, with the country’s “lack of AI-linked plays” becoming less of a drawback amid wariness over the red-hot AI trade, Bloomberg reported.

China is also attracting renewed portfolio inflows as its resilience through the Iran war and AI frenzy shows how the country “has broken step with global markets, carving it a niche as ​a sandbag against volatility,” Reuters wrote. Still, concerns over China’s slowing domestic economy and India’s weak monsoon could temper inflows, analysts said.