Latest news with #MSCIEmergingMarketsIndex
Mint
6 days ago
- Business
- Mint
Why does a stronger US dollar spell trouble for Indian equities?
MUMBAI : Prolonged periods of a strong US dollar are often associated with underperformance in emerging market equities. In the month leading up to June end, when the US Dollar Index (DXY) fell 1.85%, the MSCI Emerging Markets Index—benchmark for global investors seeking exposure to developing emerging market economies—surged nearly 6%. But as the dollar index steadied through 28 July, EM gains also moderated, with the MSCI EM Index rising only 3.04%, according to Bloomberg data. Whether this poses a risk to foreign inflows into EM stocks is now anybody's guess. Prolonged periods of a strong US dollar are often associated with underperformance in emerging market equities. In the month leading up to June end, when the US Dollar Index (DXY) fell 1.85%, the MSCI Emerging Markets Index—benchmark for global investors seeking exposure to developing emerging market economies—surged nearly 6%. But as the dollar index steadied through 28 July, EM gains also moderated, with the MSCI EM Index rising only 3.04%, according to Bloomberg data. Whether this poses a risk to foreign inflows into EM stocks is now anybody's guess. EM inflows rose modestly to $967 million in the week ended 25 July from $173 million the previous week, yet well below the $2.3 billion average seen over the past four weeks, according to Elara Capital's 25 July report. How does the US dollar affect EM flows? When the dollar weakens, EMs attract more investor flows. The MSCI EM Index jumped about 17% in 2025 till 28 July against the DXY's 9.1% decline. 'A softer dollar was a major tailwind for inflows into EMs," said Sunil Jain, vice president at Elara Capital. However, the DXY has slightly steadied over the past two weeks and even saw a recovery last week, putting pressure on EM sentiment, he explained. Foreign investors offloaded Indian equities worth ₹96,972 crore between January and July 2025, a sharp reversal from the net inflow of ₹30,813 crore seen during the year-ago period. The DXY picked up momentum over the past three weeks, rising 0.69% in the week ended 7 July, 0.64% in the week ended 18 July, and 1.5% in this week ending 1 August, reflecting continued strength in the greenback. 'The rebound in the dollar can act as a drag on EM flows," said Nilesh Shah, managing director, Kotak Mahindra AMC. Aren't there other factors to consider? There are. Shah explained EM flows are a function of multiple factors, including currency. He said long-term investors also consider earnings growth, valuation, and current account or balance of payment position to allocate money. EMs attract money 'more on growth and less on currency view", he clarified. Even Ashish Gupta, chief investment officer of Axis Mutual Fund, said the weakening US dollar may not be the sole catalyst behind inflows into EMs. He pointed out that recession fears and trade-related uncertainty in the US have largely receded, reshaping the investor sentiment and thereby strengthening the case for investments into the US markets. 'The key US indices are again nearing their all-time high now, which suggests that money may be again gravitating back towards the US, potentially slowing inflows into EMs." On Monday, Nasdaq and the S&P 500 hit an all-time high of 21,202.00 and 6,401.07 points, respectively. What's the outlook? The DXY broke below its three-year support level of 100 in April 2025, triggering a surge in EM inflows. And a move back above the 100 level could threaten this trade, said an 18 July Elara Capital report. In its monthly letter to investors, the global investment firm UBS suggested reducing excess dollar exposure. 'We expect lower interest rates, combined with fears about political interference, to affect the US dollar," it said in a 1 August note. Even American investment firm JP Morgan highlighted in its 14 July note that while tactically, in the short term, the US dollar could firm up a bit, 'we believe it will remain under pressure in the medium term, in the second half, and that has historically led to imported inflation moving up".
Time of India
22-07-2025
- Business
- Time of India
FPI flows inconsistent as India's valuation premium hits 80% over MSCI EM: Anuj Kapoor
In this edition of ETMarkets Smart Talk, Anuj Kapoor, MD & CEO, Private Wealth, JM Financial Services Ltd, shares insights on the current state of Indian equity markets and the factors influencing foreign portfolio investor ( FPI ) behaviour. Highlighting that India's valuation premium has surged to over 80% compared to the MSCI Emerging Markets Index—well above historical averages—Kapoor explains why FPIs remain cautious despite India's strong long-term growth story. He also discusses sectoral trends, earnings outlook , and the growing role of domestic investors in supporting market stability . Edited Excerpts - Markets are struggling in the first month of 2H2025. What is limiting the upside? A) For the last 4 consecutive months, Nifty has closed on a positive note MoM. However, July has been trailing negative so far. Explore courses from Top Institutes in Select a Course Category Healthcare Artificial Intelligence Finance Public Policy MCA CXO Design Thinking Data Science healthcare Project Management Operations Management Data Science Data Analytics Digital Marketing MBA Product Management PGDM Cybersecurity others Leadership Others Technology Degree Management Skills you'll gain: Financial Analysis in Healthcare Financial Management & Investing Strategic Management in Healthcare Process Design & Analysis Duration: 12 Weeks Indian School of Business Certificate Program in Healthcare Management Starts on Jun 13, 2024 Get Details From the lows seen in early April, Nifty has made a sharp recovery of about 14-15%, only about 5% down from the highs seen in late September last year (likewise movement in broader indices as well). The earnings growth slowdown and geopolitical uncertainties have been the primary factors to the market's volatility. After a muted FY25, earnings are likely to grow at a healthy 12-13% over the next 2 financial years. In fact, during June, upgrades were seen in Nifty's FY26 and FY27 EPS estimates for the first time in the last 12 months. In the very near-term, market may respond to a variety of factors. In the medium to long term, it will follow earnings growth and valuations. Indian markets are reasonably positioned supported by healthy earnings growth. While valuations are slightly higher than long term averages, justified considering the low cost of capital and robust domestic flows. However, caution needs to be exercised as there may be certain pockets of exuberance, where built in valuations expectations are high. As global players eye India's wealth market and domestic competition intensifies, what do you think will differentiate winners in this space? A) In businesses with high growth potential, competition is usually high. Market players need to present a differentiated proposition to have a right to win. Some of the differentiating factors for JM wealth are: • A forward-looking 50+ year legacy built on clients' trust • Ability to offer onshore and global solutions with seamless execution • Delivering holistic solutions beyond investment management such as estate/legacy planning and aligning wealth planning with immigration decisions, etc. • Advantages of being an integrated institution by managing clients throughout their lifecycle- addressing needs across capital raising, M&A, financing and wealth etc. • Penetration across Tier-2/ Tier-3 cities, the relatively underserved, yet emerging hotspots of wealth creation • Retain as well as engage the right talent by offering a stable environment, strong culture and compensation linked to long term wealth creation Q) The June quarter season has just begun – how do you see India Inc. faring in this quarter? Which sectors should investors watch out for? A) After a spell of muted quarterly earnings, Indian Inc. is expected to deliver healthy numbers in this quarter. The Nifty50 earnings are likely to be in low double digits YoY. However, if we exclude financials, the earnings may likely improve to mid-teens. Sectors to watch out for: Cement, Consumer Retail, Telecom and Infra are likely to be high performers. Auto, Lending Financial institutions, Consumer Durables and Utilities could be laggards Q) Everyone says it is a stock pickers market now and the day of making easy money is over. What are your views? A) After a sustained outperformance by stock markets over past 4-5 years, valuations, are generally high across the market, more so in the Mid & Small Caps. There are limited avenues with potential of valuation rerating. Unless there is another massive uptick in the earnings cycle (like the one observed post COVID), the market performance at a broader level is expected to be moderate. In this market environment, there are limited opportunities for alpha generation. However, there are opportunities for stock specific picks and contrarian bets. We follow a mix of a beta and alpha approach, wherein we manage beta with diversified strategies and look for alpha generating opportunities with bottom up managers (boutique as well as contrarian) Q) SIP crossed Rs 27000 Cr for the first time in June. What is boosting the momentum? A) Strong domestic flows through SIPs have become a main feature of Indian markets, providing stability and resilience when FPI flows have been patchy. A low-interest rate environment resulting in a lack of alternative investment avenues, unfavourable taxation on debt instruments and strong performance of equity markets in the past few years has resulted in financialization of incomes and growing equity culture amongst Indian savers, thereby boosting momentum in SIPs. Q) FIIs are still not back in India completely – is it valuations or earnings which are proving to be headwinds? A) After a blip in FY25, Indian corporate earnings growth (represented by Nifty 50) is likely to improve. The consensus estimates are pointing towards ~13% CAGR over the next 2 years. While this looks healthy, there are other markets globally that could also experience a robust earnings growth over the next 2 years. On valuations, MSCI India trades at around a 24x PE forward, which is over an 80% premium to the broader MSCI EM index. Though, India generally has traded at premium to MSCI EM, the current premium is considered even higher than its historical averages (~60% over last 10 years). In our view, the long-term India story remains intact however the relative attractiveness of other markets, especially EMs is leading to inconsistent FPI flows. Q) Which sectors are likely to drive momentum in the 2H2025? A) Looking at the global uncertainties around tariffs, wars, interest rates, etc, domestic facing players are likely to be in focus in the near term. Markets are likely to be earnings driven. The following sectors with their near-term triggers are likely to be in momentum for next few quarters: - Cement on the back of improving profitability and decent volume growth, - Oil & Gas, especially OMCs with improving marketing margins - Telecom on the back of ARPU improvement, upgrades to 5G, etc. Q) Any sector(s) which you think is overheated? A) Some sectors like EMS, Defence and Mid Cap IT have very high growth expectations built into their current valuations. These valuations could get questioned on way forward as there is little scope for disappointment in earnings.
Economic Times
22-07-2025
- Business
- Economic Times
FPI flows inconsistent as India's valuation premium hits 80% over MSCI EM: Anuj Kapoor
Agencies These valuations could get questioned on way forward as there is little scope for disappointment in earnings. In this edition of ETMarkets Smart Talk, Anuj Kapoor, MD & CEO, Private Wealth, JM Financial Services Ltd, shares insights on the current state of Indian equity markets and the factors influencing foreign portfolio investor (FPI) that India's valuation premium has surged to over 80% compared to the MSCI Emerging Markets Index—well above historical averages—Kapoor explains why FPIs remain cautious despite India's strong long-term growth story. He also discusses sectoral trends, earnings outlook, and the growing role of domestic investors in supporting market stability. Edited Excerpts - Markets are struggling in the first month of 2H2025. What is limiting the upside? A) For the last 4 consecutive months, Nifty has closed on a positive note MoM. However, July has been trailing negative so far. From the lows seen in early April, Nifty has made a sharp recovery of about 14-15%, only about 5% down from the highs seen in late September last year (likewise movement in broader indices as well).The earnings growth slowdown and geopolitical uncertainties have been the primary factors to the market's a muted FY25, earnings are likely to grow at a healthy 12-13% over the next 2 financial years. In fact, during June, upgrades were seen in Nifty's FY26 and FY27 EPS estimates for the first time in the last 12 months. In the very near-term, market may respond to a variety of factors. In the medium to long term, it will follow earnings growth and valuations. Indian markets are reasonably positioned supported by healthy earnings valuations are slightly higher than long term averages, justified considering the low cost of capital and robust domestic caution needs to be exercised as there may be certain pockets of exuberance, where built in valuations expectations are high. As global players eye India's wealth market and domestic competition intensifies, what do you think will differentiate winners in this space? A) In businesses with high growth potential, competition is usually high. Market players need to present a differentiated proposition to have a right to win. Some of the differentiating factors for JM wealth are: • A forward-looking 50+ year legacy built on clients' trust• Ability to offer onshore and global solutions with seamless execution• Delivering holistic solutions beyond investment management such as estate/legacy planning and aligning wealth planning with immigration decisions, etc.• Advantages of being an integrated institution by managing clients throughout their lifecycle- addressing needs across capital raising, M&A, financing and wealth etc.• Penetration across Tier-2/ Tier-3 cities, the relatively underserved, yet emerging hotspots of wealth creation• Retain as well as engage the right talent by offering a stable environment, strong culture and compensation linked to long term wealth creation Q) The June quarter season has just begun – how do you see India Inc. faring in this quarter? Which sectors should investors watch out for? A) After a spell of muted quarterly earnings, Indian Inc. is expected to deliver healthy numbers in this quarter. The Nifty50 earnings are likely to be in low double digits YoY. However, if we exclude financials, the earnings may likely improve to to watch out for: Cement, Consumer Retail, Telecom and Infra are likely to be high performers. Auto, Lending Financial institutions, Consumer Durables and Utilities could be laggards Q) Everyone says it is a stock pickers market now and the day of making easy money is over. What are your views? A) After a sustained outperformance by stock markets over past 4-5 years, valuations, are generally high across the market, more so in the Mid & Small Caps. There are limited avenues with potential of valuation rerating. Unless there is another massive uptick in the earnings cycle (like the one observed post COVID), the market performance at a broader level is expected to be moderate. In this market environment, there are limited opportunities for alpha there are opportunities for stock specific picks and contrarian bets. We follow a mix of a beta and alpha approach, wherein we manage beta with diversified strategies and look for alpha generating opportunities with bottom up managers (boutique as well as contrarian) Q) SIP crossed Rs 27000 Cr for the first time in June. What is boosting the momentum? A) Strong domestic flows through SIPs have become a main feature of Indian markets, providing stability and resilience when FPI flows have been patchy. A low-interest rate environment resulting in a lack of alternative investment avenues, unfavourable taxation on debt instruments and strong performance of equity markets in the past few years has resulted in financialization of incomes and growing equity culture amongst Indian savers, thereby boosting momentum in SIPs. Q) FIIs are still not back in India completely – is it valuations or earnings which are proving to be headwinds? A) After a blip in FY25, Indian corporate earnings growth (represented by Nifty 50) is likely to improve. The consensus estimates are pointing towards ~13% CAGR over the next 2 years. While this looks healthy, there are other markets globally that could also experience a robust earnings growth over the next 2 valuations, MSCI India trades at around a 24x PE forward, which is over an 80% premium to the broader MSCI EM India generally has traded at premium to MSCI EM, the current premium is considered even higher than its historical averages (~60% over last 10 years).In our view, the long-term India story remains intact however the relative attractiveness of other markets, especially EMs is leading to inconsistent FPI flows. Q) Which sectors are likely to drive momentum in the 2H2025? A) Looking at the global uncertainties around tariffs, wars, interest rates, etc, domestic facing players are likely to be in focus in the near term. Markets are likely to be earnings driven. The following sectors with their near-term triggers are likely to be in momentum for next few quarters:- Cement on the back of improving profitability and decent volume growth,- Oil & Gas, especially OMCs with improving marketing margins- Telecom on the back of ARPU improvement, upgrades to 5G, etc. Q) Any sector(s) which you think is overheated? A) Some sectors like EMS, Defence and Mid Cap IT have very high growth expectations built into their current valuations. These valuations could get questioned on way forward as there is little scope for disappointment in earnings. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Yahoo
09-07-2025
- Business
- Yahoo
Here's Why CrowdStrike (CRWD) Rose in Q2
Artisan Partners, an investment management company, released its 'Artisan Developing World Fund' second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Investor Class) returned 14.40% compared to 11.99% for the MSCI Emerging Markets Index. The Artisan Developing World Fund has returned 192.04% cumulatively, since June 30, 2015, compared to 60.03% for the index. Equities rose in the quarter despite uncertainty around US trade initiatives, strife in longer-dated bond markets, shifts in global currency preferences, and flash points in geopolitical conditions. US markets outperformed international markets in local currency terms for the same period. In addition, please check the fund's top five holdings to know its best picks in 2025. In its second quarter 2025 investor letter, Artisan Developing World Fund highlighted stocks such as CrowdStrike Holdings, Inc. (NASDAQ:CRWD). CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a global cybersecurity solutions provider. The one-month return of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was 6.44%, and its shares gained 35.59% of their value over the last 52 weeks. On July 8, 2025, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) stock closed at $507.71 per share, with a market capitalization of $126.546 billion. Artisan Developing World Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its second quarter 2025 investor letter: "Top contributors to performance for the quarter included MercadoLibre, cybersecurity software leader CrowdStrike Holdings, Inc. (NASDAQ:CRWD), NuHoldings (Nubank), Sea, and ARM Holdings. CrowdStrike continued to benefit from an industry backdrop featuring increasing network complexity and heightened security threats, while seeing strong uptake of new customer packages post-service outages last year." Security personnel at their consoles, monitoring a global network of threats in real-time. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is in not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held CrowdStrike Holdings, Inc. (NASDAQ:CRWD) at the end of the first quarter which was 77 in the previous quarter. In the third quarter of fiscal 2025, CrowdStrike Holdings, Inc.'s (NASDAQ:CRWD) subscription revenue grew 31% year-over-year and total revenue exceeded $1 billion. While we acknowledge the potential of CRWD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and shared the list of top AI Stocks in the spotlight. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
09-07-2025
- Business
- Yahoo
Sustained Momentum Boosted MercadoLibre (MELI) in Q2
Artisan Partners, an investment management company, released its 'Artisan Developing World Fund' second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Investor Class) returned 14.40% compared to 11.99% for the MSCI Emerging Markets Index. The Artisan Developing World Fund has returned 192.04% cumulatively, since June 30, 2015, compared to 60.03% for the index. Equities rose in the quarter despite uncertainty around US trade initiatives, strife in longer-dated bond markets, shifts in global currency preferences, and flash points in geopolitical conditions. US markets outperformed international markets in local currency terms for the same period. In addition, please check the fund's top five holdings to know its best picks in 2025. In its second quarter 2025 investor letter, Artisan Developing World Fund highlighted stocks such as MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. The one-month return of MercadoLibre, Inc. (NASDAQ:MELI) was 3.75%, and its shares gained 45.38% of their value over the last 52 weeks. On July 8, 2025, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $2,476.60 per share, with a market capitalization of $125.557 billion. Artisan Developing World Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its second quarter 2025 investor letter: "Top contributors to performance for the quarter included Latin American online platform company MercadoLibre, Inc. (NASDAQ:MELI), CrowdStrike, NuHoldings (Nubank), Sea, and ARM Holdings. MercadoLibre experienced sustained momentum across e-commerce and fintech businesses, including strong growth in credit card lending and deposit gathering initiatives." A customer using their phone to access an online commerce platform. MercadoLibre, Inc. (NASDAQ:MELI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the potential of MELI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered MercadoLibre, Inc. (NASDAQ:MELI) and shared the list of best non-tech stocks to buy and hold for 3 years. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
