The recent trend of foreign funds dumping Indian stocks has caused a stir in the market. Find out what this means for investors and how to navigate through these uncertain times.
Investors have been selling Indian stocks at a rapid pace in the past week due to disappointing earnings from some bellwether companies and concerns about the Israel-Hamas war.
A total of $768.4 million worth of local shares were sold by overseas funds last Thursday, the largest outflow on a net basis since June 2022. In the week through Oct. 26, they have withdrawn $1.2 billion. Friday’s data has not yet been released, but it is the largest withdrawal since February.
In spite of this, the NSE Nifty 50 Index has fallen 3.3% this month, a bit better than the MSCI Asia Pacific Index’s 3.8% decline. Investors have been jittery about domestic markets as a result of geopolitical tensions and mixed 2Q earnings in India, according to Shrikant Chouhan, an analyst for Kotak Securities.
Once valuations ease and global markets become less volatile, foreign investors may resume buying Indian shares funds.
India’s benchmark NSE Nifty 50 Index has fallen 3.3% so far this month, well below the 3.8% decline seen in the broader MSCI Asia Pacific Index.
Investors have been concerned about the near-term prospects of domestic markets as a result of geopolitical tensions and mixed 2Q earnings, according to Shrikant Chouhan, an analyst at Kotak Securities Ltd.
As valuations ease and global market volatility fades, foreign investors may resume buying Indian shares, he said.
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