After months of selling, why are foreign investors suddenly pouring billions into India?
Foreign investors are back in action, and India is their favorite destination! This week, India attracted a whopping $1.39 billion in foreign investments—the highest among all Asian markets. After months of relentless selling, this sudden surge signals renewed confidence in Indian stocks.
But what’s driving this change?
Why Are Foreign Investors Betting on India?
- Cooling Valuations – After a sharp correction, Indian equities are now more attractively priced compared to their recent peaks.
- RBI’s Liquidity Boost – The Reserve Bank of India has been injecting funds into the banking system, easing concerns over liquidity.
- Rate Cut Hopes – Investors are optimistic that the RBI might reduce interest rates in its upcoming policy review.
How Does India Compare to Other Asian Markets?
While India is enjoying massive inflows, other Asian markets aren’t as lucky:
- Taiwan saw outflows of $298 million
- Malaysia lost $161 million
- Thailand faced $89 million in withdrawals
Only Indonesia and South Korea joined India with modest inflows.
Indian stocks have surged, with the Sensex and Nifty gaining 5.5% since March. Midcap and smallcap stocks did even better, jumping 9.8% and 11.1% respectively.
However, experts warn:
- Global uncertainties (like potential US tariffs) remain a risk.
- The rally lacks strong fundamental support, so caution is advised.
India is back on foreign investors’ radar, but sustainability depends on global trends and domestic economic triggers. For now, the bulls are in charge—but will they stay?
Also Read: US Spares India from Trade Tariffs: A Boost for Exports
