Best December for FII inflows
According to a recent JPMorgan report, India remained the top destination for investment in JPMorgan's BRIC market for 2013 because of improving policy and easier monetary conditions in the country. “We remain constructive on Indian equities as we go into 2013,” said JPMorgan analysts, led by Adrian Mowat and Sunil Garg, in the recent report.
More importantly, resolution to the US ‘fiscal cliff’ dilemma and continued action from global central banks will reduce India's tail risks from macro stability tribulations, including a high external deficit, all of which could favour the Indian equity markets.
According to German major, Deutsche Bank, more investors could flock back to equities amid a fall in risk aversion and rising confidence around global growth. Further, the US is expected to stage a stronger-than-expected recovery.
“Equities are cheap relative to bonds... The ERP (Equity Risk Premium) is at its highest multi-year level since the early 1980s. In the US, reduction in fiscal policy uncertainty will be supportive of growth in H2 of 2013,” said Deutsche Bank in its ‘Themes 2013’ report.
Andrew Holland, CEO, Ambit Investment Advisory, said Indian markets benefited from a combination of events in September and remained optimistic of continued fund flows. Holland said, “India was the cleanest shirt in the laundry basket because of the conditions in global market. While the laundry basket could change, it doesn't mean FII inflows will stop coming to India.”
Indian markets has also attracted the highest
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