CHART OF THE WEEK 📈
For the last nine months FIIs have been consistently selling out of the Indian markets, and in that period the markets have gone through its fair share of volatility.
Overall FIIs sold Rs. 2.3 lakh crore in the nine months, and the markets have down 5% in this period - whoever got a sense of pride by saying foreign selling doesn't matter and that domestic participation is enough to keep the bulls running.
But they’re back! July was the first month when foreign investors started buying into India again, and August figures just hit it out of the park - Rs. 50,000 crore in equities, making this a 20-month high!
Why would they be buying?
India continues to be one of the fastest growing economies in the world, in a globally challenging macroeconomic environment
While the world grapples high inflation, increasing interest rates and a slowdown (or even a recession), opportunities in their respective homelands appear scarce
That said, the Indian markets are trading at a steep valuation premium, which may not justify sustenance of the uptrend, unless earnings pick up materially.