Asian takeaways - Time Correction Thali

Feb 02, 2026

India's equity market has cooled significantly since late 2023, with weakened macro conditions and lacklustre domestic consumption driving a valuation decline relative to peers like China, though government stimulus efforts and long-term structural opportunities in sectors such as renewables, financials, and manufacturing maintain its appeal for selective investors despite near-term challenges.

Key takeaways:

    • India’s equity markets have cooled since late 2023, reversing a period of outperformance against broader emerging markets and China.
    • India’s valuation premium has narrowed significantly, particularly versus China, as investors prioritize themes like AI and defence.
    • Despite near-term challenges, India retains structural growth potential in sectors like power/electrification, financials, healthcare, and manufacturing.

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