William Blair's Todd McClone: Divergent paths between China and India

Dominant emerging markets

Together, China and India comprise 44% of the MSCI EM Investable Market Index (IMI). The stark differences between the two markets are becoming increasingly pronounced, and although much of the pessimism around China is currently reflected in valuations, we continue to have a more constructive view of Indian stocks.

From a leverage perspective, India's economic health is considerably more robust than China's: non-financial corporate debt to GDP is 51% in India, compared with 165% in China, and household debt to GDP is 19% in India and 65% in China. On a fundamental level, India's demographics, politics, transparent monetary policy, and alignment with the West stand in contrast to China's, which should continue to support the momentum of India's stock market.  Friday Briefing: Does China carry an unfair geopolitical risk premium versus the US? China's market, on the other hand, is becoming mor...