Share Market: India’s stock market is about to boom! Foreign investors are loving these stocks

Indian stock market boom: The weightage of India in the Emerging Markets Index has increased, and foreign investment is expected to increase. Foreign investors have bought Indian shares worth Rs 53,178 crore, or $6.33 billion, so far in 2024, and have been net buyers since June.

India is soon going to surpass China in the MSCI Emerging Markets Index, which is an indicator of major emerging markets. According to a report by global investment bank Morgan Stanley, this will attract more foreign investors to India, leading to a further boom in the Indian stock market. Morgan Stanley says that India is already performing better than other markets globally.

However, this bull run is only halfway through, and small corrections will be followed by the Indian market reaching new heights. Morgan Stanley says that India's weightage in the MSCI Emerging Markets Index has increased to 19.8% after the recent changes, while China's weightage has decreased to 24.2%. India's weightage has been consistently increasing since December 2020, when it was 9.2%, while China's weightage has decreased from 39.1%.

Foreign investors like these stocks

Sector Investment
Consumer Durables 5,297
Information Technology 4,529
IT Services 4,251
Financial Sectors 2,782
Oil and Gas 2,518
Healthcare 2,369
Consumer Services 1,962
FMCG 1,815
(Investment amount in crores)

The peak of the boom is yet to come

Morgan Stanley's analyst Ridham Desai said that any correction in the Indian equity market will be mild. The market will continue to boom, as fiscal consolidation will boost private borrowing and spending, leading to the next phase of income growth and an increase in foreign investment. He said, "We believe that the Indian market still has a lot to offer, and its share in the Emerging Markets Index will increase."

Advice to invest in large private banks

Morgan Stanley said in its report that the sources of possible corrections in the market are fundamental and technical. However, this does not mean that the bull market will end. The market's valuation is high, and a correction may be seen in the Indian market as well, following a sell-off in the US. The global brokerage firm has advised investors to invest in large private banks instead of government and mid-sized private banks. It has also emphasized the need for investors to be more selective.