Kospi's YTD 53.5% surge on corporate reforms draws capital from Nifty, highlighting India's 1.9% lag amid tariff uncertainties.
South Korea's Kospi index edged 0.1% higher to 4,154, amid mixed Asian cues, triggering 2.5 billion dollars in foreign institutional investor sales from Indian markets this week. The benchmark's volatility—peaking above 4,200 before a 3% dip—mirrors AI-driven sell-offs, contrasting India's flat Nifty at 25,900.
This capital rotation impacts India's 18% weight in MSCI Emerging Markets, potentially trimming 1% from GDP forecasts if sustained, per S&P models. Year-to-date, Kospi's 53.5% return dwarfs Nifty's 1.9%, fueled by chaebol restructuring unlocking 21% upside in tech-linked stocks.
Policy divergence amplifies flows: Korea's ownership reforms contrast India's 7% capex growth, with rupee at 84.5 per dollar absorbing 2 lakh crore rupees in sales. Consumer inflows via systematic investment plans hit 3 lakh crore rupees, buffering retail sentiment at 95 index points.
Innovation in ESG funds could reclaim 10% allocations, as Indian green bonds issuance reaches 50,000 crore rupees. Economically, the shift dents IT exports 5%, but 11 trillion rupee infrastructure offsets pressures in a 7% growth trajectory. As Kospi stabilizes, India's resilience hinges on earnings visibility.
