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Foreign investors are increasingly withdrawing from India's stock market, driven by a cooling economy and declining growth prospects. Over the past four months, foreign portfolio investor flows into Indian equities have plummeted by 99%, with foreigners remaining net sellers, according to data from India’s National Securities Depository. Analysts note that this trend has led to a loss of more than $600 billion in market value over the past month. Despite the foreign exodus, domestic investors have stepped in, contributing approximately $27 billion to the market, which has helped mitigate a more severe decline. Experts believe that the upcoming federal budget could play a critical role in reviving consumption and restoring confidence in Indian stocks, which have experienced cyclical consolidation after four years of strong performance post-COVID.
Just a healthy correction? “Indian equity markets are going through a cyclical consolidation after four strong years of returns post Covid,” said Pramod Gubbi, co-founder of Marcellus Investment Managers. “I would see this as a healthy correction.” Gubbi added that if…
‘Onslaught’ of domestic investors In contrast with the exodus of foreign money, India’s local investors have continued to pile into the Indian market, partially stemming what could have been a deeper decline in equities. Domestic investors have funneled in around $27 billion…
#Foreigners remain net sellers of Indian equities, said James Thom, senior investment director at Abrdn. There has been a rotation out of India and emerging markets stocks into U.S. equities, Thom added. “Foreigners have been largely absent from the India story in the past…