The Nifty closed at 24,365 on Monday, compared with 25,179 recorded before the start of the war, leaving the index about 3% below earlier levels. The benchmark has, however, gained nearly 9% from its March lows.
In contrast, global emerging markets have staged a stronger rebound. China’s CSI 300 Index has rallied as much as 8% from its March lows, while Taiwan’s Taiex and South Korea’s Kospi have surged 17% and 23%, respectively.
As a result, the MSCI EM Index has erased its losses and is now trading near the 1,600 level, last seen before the conflict began.
The divergence reflects India’s relatively lower weight in the MSCI EM Index. The underperformance of Indian equities has also narrowed their valuation premium to about 55%, from 75% around two years ago.
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At the end of March, China held the highest weight in the index at 25.48%, followed by Taiwan at 22.53% and South Korea at 15.48%, while India ranked fourth with a weight of 12.58%.
Meanwhile, oil prices remain a key risk. Brent crude surged more than $10 per barrel intraday on Monday from Friday’s low of $86.09, moving closer to the $100 mark after the US Navy seized an Iranian vessel in the Strait of Hormuz.
According to Jonathan Garner, Chief Asia and Emerging Markets Equity Strategist at Morgan Stanley, investors who re-engaged in Asia and emerging market equities earlier this month may consider trimming exposure.
He noted that most of the losses seen in March have already been reversed, with the MSCI EM Index back at end-February levels and offering limited upside to the brokerage’s base-case target.
Garner also flagged uncertainty around the ceasefire between the US and Iran, which is set to expire in two days, with concerns over renewed disruptions in the Strait of Hormuz.
First Published: Apr 20, 2026 5:56 PM IST
