Right-sizing hopes after heightened optimism

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Updated: August 11, 2016 4:13:14 PM

Portfolio inflows moderated in April and reversed into outflows in May as foreign institutional investors (FIIs) retreat because of lack of reforms.

Portfolio inflows moderated in April and reversed into outflows in May as foreign institutional investors (FIIs) retreat because of lack of reforms. Equity investors are reallocating funds elsewhere as they have been overweight on India for some time now and earnings have been disappointing lately. Moreover, uncertainty around the government’s attempt to levy Minimum Alternative Tax (mat) on FIIs’ capital gains have hit investor sentiment. Last year, foreign investors were attracted to Indian equities on hopes of sweeping reforms by the Modi government.

 

 

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