Foreign inflows into Indian equities are on the rise. With the help of indications of better earnings momentum and softening valuations, foreign inflows into Indian equities in February are expected to top local institutional demand for the first time in 17 months.Bloomberg reported that through February 24, global funds added a net $2.1 billion in shares, surpassing the $1.8 billion purchased by domestic rivals. If it continues, foreign inflows will surpass domestic buying for the first time since September 2024.
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The purchase follows India’s successful completion of a long-awaited trade agreement with the United States earlier this month, while Chinese stocks traded in Hong Kong fell the most since October in comparison to their Indian counterparts.Earnings for the December quarter also indicated improvement, and Jefferies predicted that MSCI India’s profits would increase by roughly 10% throughout the fiscal year that ended in March.Global funds increased their exposure to the capital goods and financial services industries, but earlier this month they sold information technology equities, reducing their holdings due to worries about artificial intelligence.
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