Foreign investors’ interest in Indian equities appears to be recovering with year-to-date (YTD) inflows into equities crossing $7-billion...
Foreign investors’ interest in Indian equities appears to be recovering with year-to-date (YTD) inflows into equities crossing $7-billion mark on Thursday, after seeing $1.027 billion total outflows in the previous two months.
Inflows into India is third highest across Asian and emerging markets (EMs) after Japan ($31.74 billion) and Brazil ($7.25 billion), data showed.
FPIs purchased $117.14 million on Thursday according to provisional data from stock exchanges, taking the tally to $738.8 million in July. Overseas funds had sold $960 million of shares in June, making it the worst month for equity foreign flows in nearly two years.
Experts say FPIs who were pulling out switched back to India after the Chinese market turmoil in the last one month.
Going forward, Nomura foresees significant improvement in corporate earnings in June quarter with the best sequential growth in the past four years for sales, ebitda and net profit.
“Despite worries on growth, we expect a recovery in earnings, both due to base effects and sequential improvement in economic growth… Any positive growth data would likely lead to a multiple expansion,” said Prabhat Awasthi, MD & head of equity, Nomura India.
While concerns linger inflows into India as well as EMs will be impaired if the US Fed hikes rates in its September policy meet but Abhay Laijawala of Deutsche Equities India says, “India will be relatively less impacted as the EM differentiation is likely to intensify further as global commodity deflation becomes more entrenched.”