According to a Reuters report, it has been highlighted that foreign investors are making a significant return to the Indian stock markets, marking a notable shift in investment sentiment.
Stock market data reveals a substantial influx of $6.4 billion from foreign investors into Indian equities since the commencement of July. This comes on the heels of a substantial sell-off amounting to $27 billion worth of stocks in the initial half of 2022. The resurgence in overseas investment has been particularly pronounced, with August witnessing inflows exceeding $5 billion alone.
The driving force behind this resurgence? Projections indicate that Indian companies are poised to deliver robust earnings amidst a backdrop of declining crude oil prices. Moreover, a downward trend in commodity prices is anticipated to bolster the profit margins of leading Indian corporations.
According to Refinitiv statistics, there is optimism regarding the performance of India’s large and mid-cap companies, with net earnings forecasted to expand by an impressive 18.9% next year, marking the highest growth rate in Asia.
Analysts further anticipate a stabilization in the depreciation of the rupee as foreign capital re-enters India’s bond and equity markets. This renewed confidence from overseas investors is expected to contribute positively to the overall stability and growth of the Indian economy.
The resurgence in foreign investment underscores a renewed sense of confidence in the Indian market’s resilience and growth potential. As India continues to position itself as an attractive destination for investment, these developments bode well for the country’s economic trajectory in the foreseeable future.
Donald G. is the Principal Consultant at NRI Money+. He specialises in creating personalised financial plans for NRIs (Non-Resident Indians) and HNI (High Net-worth Individuals).
