New Delhi, March 20 -- The past six months have showcased a stark divergence in the stock market performance of emerging markets (EM), with China leading the pack with a strong 26.4% gain. In contrast, several other markets, including India, Brazil, Malaysia, and Indonesia, have faced corrections, underscoring the complex market dynamics at play.

While India's stock market has seen a valuation correction, it continues to command a premium, supported by higher return on equity (ROE) expectations, according to a report by Yes Securities.

A significant trend emerging is the narrowing spread between the Price-to-Earnings (PE) ratio of Nifty 50 index and the broader EM index. This spread has declined to nearly one standard deviation (SD) bel...