Global market: The majority of Asian stock exchanges are experiencing pressure due to concerns over US President Donald Trump's tariff barrier and trade war. The Indian and Japanese stock markets have taken the brunt of the beating, with the BSE Sensex rising more than 4% over this period, the Japanese Nikkei losing 1.35 percent year-to-date, and India's Nifty 50 index plunging about 4% in 2025. The Chinese stock market, on the other hand, is unaffected by this mindset in the global market, as evidenced by the more than 3.50 percent increase in the country's flagship SSE Composite Index this year. The China stock market's SZSE Component Index has returned about 9% year-to-date, In contrast, the CSI 300 index surged by more over 4%.
Following Donald Trump's inauguration as the 47th President of the United States on December 20, 2024, the Chinese stock market has become a major destination for portfolio flows, according to stock market specialists. FIIs and domestic investors now trust the stimulus plans of the Chinese government. According to them, the 'Sell India Buy China' notion helps the Chinese stock market because Chinese equities are cheaper while Indian stocks are still selling at high prices.Benefits of portfolio flows
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, discussed the factors that have contributed to the Chinese stock market's rise in the face of weak global market sentiments. He stated: "The US market has been drawing significant inflows of capital from around the globe since Trump's victory in the US presidential election. China has become a popular destination for portfolio flows in recent years. Hopes for a Chinese growth rebound have been rekindled by the president's new measures with their top businesses. The stock market in China reacted favorably to this. In stark contrast to the Nifty's 1.55% loss, the Hang Seng index—which FIIs purchase Chinese companies through the Hong Kong stock market—rose 18.7% in just one month.
Appealing prices
"Since Chinese stocks continue to be cheap, this 'Sell India, Buy China' trade may continue," stated VK Vijayakumar of Geojit Financial Services, pointing to the alluring values of Chinese stocks. However, he stated that because structural issues are impeding China's economic recovery, the "Sell India, Buy China" trend has already occurred and would soon come to an end.
Rant: "Sell India, Buy China."
Vaibhav Porwal, co-founder of Dezerv, highlighted the change in FII money flow by stating, "China's market capitalization has increased by US $2 trillion since October 2024, whereas India's has decreased by almost US $1 trillion. This implies that FII flows have undergone a tactical change. In January 2024 alone, Foreign Portfolio Investors (FPIs) withdrew over ₹25,000 crore from Indian stocks, according to data from NSDL. This is a stark contrast to the significant inflows of more than ₹1.7 lakh crore in 2023.
Chinese stimulus
"A number of factors contributed to China's recent surge, with its economic stimulus having a broad effect on the economy. Through rate reductions, assistance for the real estate industry, and liquidity infusions, China has stabilized its economy. Particularly following an extended period of policy tightening, these actions have contributed to the recovery of investor confidence," Vaibhav Porwal of Dezerv stated.
Push for DeepSeek
"DeepSeek has upended the US-dominated tech industry by providing solutions at a far lower price, opening up AI-driven solutions to the global community. Vaibhav Porwal stated, "The Chinese stock market has benefited from DeepSeep in recent sessions, but it is too early to comment on the overall impact."
In the Indian stock market, FII selling is still going strong. In January, FIIs sold equities for ₹81903 crores through the exchanges. On February 21, 2025, they sold stocks for ₹30,588 crores. This brings the overall sales for 2025 to ₹1,12,492 crores (NSDL) thus far. As a result of this enormous selling, the Nifty has produced 4% year-to-date negative returns.
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