India outpaces China in global capital inflows as Nifty gains 6.7% in April
Synopsis
India beat China in drawing global capital in April 2025, with the Nifty posting a 6.7% monthly gain that outpaced most major markets. A Quant Mutual Fund analysis says India's nominal GDP edge, stable macros, and a largely-completed small-cap correction make it the standout emerging market play right now.
Key Takeaways
India outperformed China in attracting global capital flows in April 2025 , according to a Quant Mutual Fund analysis.
Nifty gained 6.7% in April, rising 1,318 points from 22,679.40 to 23,997.55 , outperforming most major global markets.
US equities rose ~ 9% ; Nikkei 225 surged 11.6% ; Shanghai index gained 5.6% in April.
Gold and silver fell up to 4% in April; Brent crude rose ~ 8% .
Preferred sectors: energy , infrastructure , financials , telecom , pharma , and data centres ; manufacturing underweight.
The small-cap correction in India appears to have largely run its course , per the report.
India has outperformed China in attracting global capital flows even as equity markets worldwide staged a broad recovery in April 2025, according to an analysis by Quant Mutual Fund. The rebound, following a decline in March, was driven by easing geopolitical tensions and a marked improvement in investor sentiment globally.
India's GDP Edge Over China
The Quant Mutual Fund report noted that India's nominal GDP growth continues to outpace China's, positioning the country as a preferred destination for global investors seeking emerging market exposure. Stable fiscal and monetary conditions, along with supportive liquidity, are expected to aid credit expansion and strengthen the outlook for financial services.
The report also noted that the recent correction in Indian equities — particularly in the small-cap segment — appears to have largely run its course, with improving corporate earnings expected to support further upside.
Market Performance in April
US equities rose approximately 9% during April, while the Nifty gained 6.7%, outperforming most major global markets. China's Shanghai index rose 5.6%, while Japan's Nikkei 225 surged 11.6%.
In absolute terms, the Nifty gained nearly 1,318 points or approximately 6% in April alone, rising from 22,679.40 to 23,997.55. However, between 27 February and 30 April, the index was still down 1,181 points or 4.7% from 25,178.65, reflecting the deeper correction that preceded April's recovery.
Geopolitical Developments and Commodities
A ceasefire agreement involving the US, Israel, and Iran on 8 April, later extended indefinitely, helped stabilise global sentiment, according to the report. A US naval blockade of Iranian ports, however, remained in place. In commodities, gold and silver prices declined by up to nearly 4% during April, while Brent crude rose approximately 8%. The US Federal Reserve kept interest rates unchanged during the month.
Preferred Sectors and Investment Outlook
The Quant Mutual Fund analysis suggests the current phase could present a favourable entry point for investors, with portfolios tilted towards large-cap stocks and selective exposure to mid- and small-cap segments. Preferred sectors include energy, infrastructure, financials, telecom, pharmaceuticals, and data centres. Manufacturing remains underweight in the fund's view, due to ongoing input cost and supply chain concerns.
With India's macroeconomic fundamentals intact and global risk appetite recovering, analysts will be watching whether the momentum in capital inflows can be sustained through the second half of 2025.
Point of View
But the framing deserves scrutiny. The Nifty's 6.7% April gain looks impressive until you set it against the 4.7% drawdown between late February and end-April — investors are still net negative over that window. More critically, the narrative of India 'outpacing China' on GDP growth is not new; what is new is the degree to which global funds appear to be acting on it post the US-China tariff escalation. The real test will be whether FII flows hold once the geopolitical ceasefire optimism fades and the Fed's rate trajectory becomes clearer. India's macro story is solid, but the current entry-point thesis rests heavily on sentiment, not just fundamentals.
NationPress
9 Aug 2026
Frequently Asked Questions
Why is India outpacing China in global capital inflows?
According to a Quant Mutual Fund analysis, India's nominal GDP growth continues to outpace China's, making it a preferred destination for global investors. Stable fiscal and monetary conditions, supportive liquidity, and improving corporate earnings have further strengthened India's appeal.
How much did the Nifty gain in April 2025?
The Nifty gained approximately 6.7%, or nearly 1,318 points, in April 2025, rising from 22,679.40 to 23,997.55. This outperformed most major global markets, including China's Shanghai index, which rose 5.6%.
What sectors does Quant Mutual Fund recommend for investors?
The fund's analysis recommends energy, infrastructure, financials, telecom, pharmaceuticals, and data centres as preferred sectors. Manufacturing remains underweight due to input cost and supply chain concerns.
What geopolitical event helped stabilise global markets in April 2025?
A ceasefire agreement involving the US, Israel, and Iran on 8 April 2025, later extended indefinitely, helped stabilise investor sentiment globally. However, a US naval blockade of Iranian ports remained in place, according to the report.
Is the small-cap correction in India over?
According to the Quant Mutual Fund report, the recent correction in Indian equities — particularly in the small-cap segment — appears to have largely run its course. Improving corporate earnings are expected to support further growth in this segment.
