JPMorgan Private Bank Favors Indian Stocks Over China On Value
JPMorgan Private Bank has announced its preference for rotating from Chinese equities into Indian stocks, citing the strong domestic market and policy support in the South Asian nation as key factors that offset its high valuations.
Why India Over China?
According to Timothy Fung, head of Asia equity strategy at the bank in Hong Kong, it is “a good time to switch into Indian equities since they have underperformed so much.” This statement comes as the Hang Seng index has recently risen to four-year highs above 26,000, prompting the bank to shift its focus from China to India.
China’s market has experienced a significant rally this year, driven by excitement around DeepSeek and easing US-China relations. In contrast, India has lagged behind the region in 2025 by the widest margin in decades, although its benchmark NSE Nifty 50 Index briefly hit a record high on Thursday as global funds returned amid stronger corporate earnings. The Nifty fell 0.4% on Friday, outperforming its Asian peers that are reeling from a selloff in tech shares.
Valuation Call
Fung noted that “with GDP growth projected at 6%-7% and earnings likely to rise in double digits, the case for rotating into India is gaining traction.” He emphasized that this is “purely a valuation call,” and the bank would consider moving back into China if the Hang Seng falls to 24,000. The gauge closed little changed at 25,835.57 on Thursday.
Much of the optimism around India depends on the progress in trade talks with the US, especially as valuations remain elevated. The Nifty trades at about 21 times one-year forward earnings, well above the 12.5 times multiple for the Hang Seng.
Historical Context
Still, Fung is unfazed by India’s premium, noting that “India has historically traded at levels above 20 times.” This historical context is crucial in understanding the current market dynamics and why the bank is favoring Indian stocks over Chinese equities.
Indian equities have shown unusual resilience in recent weeks, even as global markets wobbled. The Nifty is up almost 2% this month, compared with an around 4% drop in MSCI Inc.’s regional gauge, as investors position for a possible US-India trade deal.
Trade Talks and Local Demand
India’s trade minister said this week that a final agreement is expected soon after months of talks to cut 50% duties previously levied. Fung said that even with US tariffs in place, much of the country’s growth is being fueled by local demand as production shifts from China. With Prime Minister Narendra Modi’s party winning a crucial election victory in the state of Bihar, reforms are back on track, he added.
“India has been underperforming due to tariffs, and that gives a pretty good window to re-enter India as a trade,” Fung said. “Right now, the window is still open, and everyone is still underweighting India because they don’t understand India like they understand the Chinese market.”
Investing in India
For investors looking to capitalize on the growth potential of the Indian market, it is essential to understand the current trends and dynamics. The Indian stock market news is filled with opportunities, from the Nifty 50 index to the Sensex index. Investors should also keep an eye on the US-India trade deal and its potential impact on the market.
Conclusion
In conclusion, JPMorgan Private Bank’s preference for Indian stocks over Chinese equities is a significant development in the world of finance. With the Indian market showing resilience and the potential for growth, investors should consider investing in India as a viable option. As always, it is crucial to stay informed and up-to-date with the latest Indian stock market trends and news to make informed investment decisions.