In a widely viewed social media post, Shankar Sharma has compared India's recent stock market outperformance to the illustrious career of superstar Rajesh Khanna during the 1970s, which was challenged by Amitabh Bachchan's rise to fame with the 1973 blockbuster 'Namak Haraam', with China emerging as a challenger to India in a two-horse race.
"The problem with the Indian stock market is that for the past 3 years, it was like Rajesh Khanna between '70 & '73: back to back, 14 super hits. Uncontested. Then came a UP ka bhaiya, a classical 4 AM bet & "Namak Haraam" suddenly made it a 2 horse race. That bhaiya is China," Shankar Sharma posted on X on November 4.
Shankar Sharma's analogy comes at a time of a notable sell-off in the Indian stock market, with benchmark indices declining nearly 10 percent from all-time highs.
In September, China's central bank and Finance Ministry unveiled major policy push and stimulus to tide over a deflationary spiral in the economy, taking foreign investors off guard and causing a pivot from India to China.
China's stimulus push has compelled India's foreign investors to re-evaluate their strategies and outlook towards both the equity markets. Since China announced its stimulus, the Nifty 50 has declined by 8 percent, while China's Shanghai Composite has gained 17 percent.
Referring to China as the "UP ka bhaiya" signifies a disruptive quotient in the global equity market landscape, while the metaphor of a "classical 4 AM bet" captures a bold gamble. Today, the equity market dynamic have transformed into a "two-horse race" in emerging market, Shankar said, where India must now contend with its neighbourhood stock market that is vying for foreign capital.
Additionally, FIIs have been booking profits out of India ahead of the upcoming US Presidential election.
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Shankar Sharma's analogy captures the journey of India's stock market this year, which has enjoyed a rise fuelled by favourable policies, an Assembly Election verdict promising continuity, Union Budget pushing for jobs and capex, and a surging domestic flow into equities that has been powered by strong retail participation.
In October alone, FIIs sold Indian equities worth Rs 1.14 lakh crore, with the market being supported by domestic institutional investors (DIIs) who bought shares worth Rs 1.07 lakh crore.
The key question remains: Will Indian stocks reclaim its superstar status, or will the China reshape the EM landscape for the near term?
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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