Christopher Wood, a prominent strategist at the US investment banking firm Jefferies, is urging global investors to bolster their investments in India’s stock market while reconsidering their positions in US equities. This shift comes amid rising uncertainties in the capital markets, largely attributed to the recent tariffs announced by former President Donald Trump. Wood expressed his optimistic view on Indian stocks during a recent episode of the Money Maze Podcast, drawing parallels between India’s current economic landscape and China’s early 2000s growth trajectory.

India: The Emerging Market Powerhouse

In his podcast, Wood emphasized that India’s economic indicators mirror those of China at the dawn of the 21st century. He pointed to several key factors fueling his bullish outlook:

• Demographics: India’s youthful population presents a significant advantage.
• GDP Per Capita: The steady growth in GDP per capita signals economic resilience.
• Entrepreneurial Spirit: A vibrant culture of entrepreneurship is fostering innovation and business growth.

Wood has consistently championed India as a prime destination for investment in emerging markets over the past two decades. He noted, “For the last 20 years, I’ve championed the Indian markets as the best in the emerging world due to its demographics and dynamic entrepreneurial culture, along with a plethora of promising companies.”

Market Reactions and Opportunities

The Indian stock market experienced a rocky start to the financial year 2025-26 following Trump’s announcement of reciprocal tariffs on April 2, 2025. Despite this volatility, the Nifty 50 index surged by 5.99%, while the BSE Sensex rose by 5.61% over the following five trading sessions.

Wood pointed out that many global investors are currently underweight in India, not due to a lack of interest but because of high valuations and a market primarily fueled by domestic investors. This situation presents a unique opportunity for long-term investment in Indian equities.

Time to Reassess US Stocks

While there is potential for the US market to regain momentum through tax cuts and deregulation, Wood remains cautious. He stated that US stocks are likely to underperform compared to other markets, particularly in the context of a weakening US dollar and a bearish Treasury bond market.

Investors are encouraged to consider adjustments in their portfolios. Wood advised that in the Asia Pacific ex-Japan relative-return strategy, reducing exposure to Taiwan by 1% could create room for an increase in Indian market investments.

Long-Term Optimism Amidst Challenges

Despite uncertainties surrounding tariffs and market fluctuations, experts continue to advocate for investing in the Indian stock market with a long-term vision. Mark Matthews, another analyst, echoed this sentiment, suggesting that while there may be short-term challenges such as slow consumption rates, recent fiscal and monetary stimulus is poised to enhance growth in 2025.

• High-frequency data indicates a slowdown in consumption and government capital expenditure.
• However, the forward price-to-earnings ratio in India has dipped below its 10-year average, making it an attractive investment opportunity.
• Analysts favor large-cap stocks for their stability and strong fundamentals over mid- and small-cap stocks.

In conclusion, with strategic insights from experts like Christopher Wood and Mark Matthews, investors are encouraged to explore the promising landscape of the Indian stock market, positioning themselves for substantial long-term gains.