India has outsmarted China in getting its stock market benchmark surge past the 20,000-point milestone, but the domestic stocks are still much cheaper than those in its rival emerging economy, indicating that foreign investors would continue to log onto the bourses here.
When compared in terms of the price-to-earnings ratio, the Indian stocks are currently trading at 26.3 times of the earnings, as compared to about 53 times in China, making them much attractively valued than those in the Communist neighbouring nation.
Moreover, the rally in the Indian stocks have been relatively steady. While India's Sensex took nearly 20 months to double from 10,000 level on February 6, 2006, China's stock market's barometer has nearly tripled in 10 months since the beginning of this year.
Sensex is the world's 33rd stock market index to cross the 20,000 level and India is the 20th nation to achieve this feat as a number of markets have more than one of their indices trading above this level.
However, none of the indices in China has so far crossed this milestone and India is the second Asian nation only after Hong Kong to reach this mark.
Among the BRIC countries also, China is the only country not to have reached this milestone as both Brazil and Russia have their indices trading above 20,000 points.
While in terms of the companies' market capitalisation, China is way ahead of India, the rally on Chinese bourses is making regulators and government of that country wary of a possible bubble.
The sharp rally in Chinese stocks this year has even prompted the country's securities regulator saying that the market holds "great risks".