India ETFs Fall as US-China Tensions Ease

That tension is showing up in market proxies for India and China. The iShares MSCI India ETF, ticker INDA, closed at $46.52 on Oct. 2, below its 50-day moving average of $48.99 and 200-day average of $49.85, while the iShares China Large-Cap ETF, FXI, fell to $33.19, also under its 50-day and 200-day averages. The India-focused EPI ETF finished at $40.53, below its 50-day average of $42.51, underscoring how investors are still cautious even as they parse the diplomatic thaw.

Adalytica’s US–China Relations Sentiment gauge stood at 57, a neutral reading, but fell 7 points in a day and 43 points over a week, suggesting the latest improvement is being viewed as fragile rather than decisive. At the same time, Adalytica’s Global Stability Sentiment sat at 4, labeled extreme fear, highlighting how much geopolitical uncertainty still hangs over cross-border capital flows.

For India, the economic stakes are straightforward. A more functional US-China relationship could reduce the urgency behind supply-chain shifts, weaken the case for treating India as the main beneficiary of “China plus one” diversification and complicate New Delhi’s effort to present itself as an indispensable pole in a less aligned global order.

Investors will be watching whether the diplomatic thaw translates into trade, investment and technology cooperation, or whether it remains a tactical pause in a broader rivalry. For now, the market message is that India’s multipolar pitch still has buyers — but not enough to shake off a world that remains structurally bipolar.