Theranautilus Secures $1.2 Mn in Seed...
19 Nov 2024
After two months of significant selling, foreign institutional investors (FIIs) turned net buyers in June, purchasing shares worth $3.2 billion—the second-highest monthly inflow after March's $4.2 billion.
This shift is notable given the $3.1 billion sell-off in May and $1.04 billion in April.
The Indian markets have been on a winning streak since the early June election results, with the Sensex and Nifty hitting new highs almost daily, despite analysts' predictions of a correction due to high valuations.
Contrary to these predictions, the Nifty has risen 11% this year. In June, the Sensex and Nifty surged nearly 7%, and over the June quarter, they increased by 7.3%.
The BSE MidCap and SmallCap indices performed even better, gaining 7.7% and 10.8% in June, and 17% and 21% quarterly, respectively.
Experts believe FIIs are expressing strong confidence by increasing bullish positions in Indian equity derivatives, with net index futures contracts at their highest bullish interest in seven years.
Historical trends suggest that July may continue this positive trajectory, with Indian equities gaining every July since 2014, except for 2015.
Earnings growth is also projected to exceed 30% this fiscal year.
Domestic investors, both retail and institutional, have significantly supported the market, rallying post-election despite lower FPI allocations and $3 billion withdrawals.
Domestic funds and retail investors now drive Nifty50 flows, reflecting confidence in India's economy and corporate earnings.
Analysts foresee future FPI realignment potentially bringing $100 billion in foreign funds over the next 3-5 years, driven by government policies aimed at inclusive growth, infrastructure development, and fiscal discipline.
This is expected to boost rural demand and overall consumption, key drivers of India's GDP, with short-term market fluctuations deemed less significant.
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