China's stock correlation with India reaches record all-time low

The 360-day correlation between stocks in China and India has fallen to the lowest level on record, as two of the world’s largest markets increasingly appear to be going in opposite directions.

The link between moves in the MSCI China Index and MSCI India Index weakened last week below its previous all-time low, set in 2022, according to data compiled by Bloomberg. The Chinese gauge has more than doubled gains in the Indian measure since February with a push from Beijing’s stimulus, while India’s rally has cooled on valuation concerns.

Some two decades of high correlation between the two giant emerging markets broke down in late 2021, as India’s strong economic growth and improving geopolitical climate sparked a record-setting rally that coincided with a slump in Chinese equities amid a stuttering economic recovery and worsening relations with the US.