Home / Financial Services/ Foreigners turn into buyers of Indian shares ahead of elections

Foreigners turn into buyers of Indian shares ahead of elections


Comments / {{hitsCtrl.values.hits}} Views / Thursday, 14 March 2019 01:23

Facebook

Reuters: Foreign investors are returning to Indian stock markets, attracted by the odds Prime Minister Narendra Modi’s party will win coming elections and by hopes for deeper economic reforms and more monetary policy easing.

Stock exchange data showed net foreign portfolio inflows into India hit a 15-month high of $ 2.42 billion in February, a big swing from 2018’s net outflows of $ 4.4 billion, the largest since the 2008 global financial crisis.

Inflows have been sustained this month, with the market riding a wave of patriotism following India’s military strike on Pakistan in retaliation for a suicide attack in the disputed Kashmir region.

Most analysts say Modi’s action following the Kashmir attack improve his chances in the massive, seven-stage vote that will begin on April 11.

“There is a feeling that this will help the incumbent party earn brownie points as they head into elections,” said Hitesh Agrawal, an executive vice-president and head of retail research at Religare Broking.

Also helping the market has been Modi’s populist budget unveiled last month and a Feb. 7 rate cut by the central bank.

The Nifty has risen over 11% since a trough on Oct. 26. It rose 3.2% in 2018.

Sunil Sharma, chief investment officer with Sanctum Wealth Management, said foreign institutional investors are “enthusiastic about reforms the present government has pursued and forward-looking prospects for India... a number of factors which looked like headwinds in 2018 are being resolved.”

 

Spotlight on mid-caps

Mid-cap stocks that took a beating in the past couple of years have been major gainers. 

The Nifty mid-cap 100 index jumped over 7% since Feb. 22, more than the overall Nifty 100 index’s 4% gains.

The mid-cap index fell 15% in 2018.

Utilities, industrials and material sectors have gained in the past two weeks, while the Indian IT sector took a hit.

 

Lagging other Asian equities

Despite gains, Indian stocks are underperforming others in Asia this year, with the Nifty up 2.2% in dollar terms, making it the third worst performer in the region.

“The rise in oil prices and, more importantly, event risk from upcoming elections after the BJP’s losses in the recent state elections have kept investors on the fence as they wait for events to unfold,” Societe Generale analysts said in a note on Monday.

“A short-term de-rating of the equity markets amid an adverse election outcome would likely be arrested soon, in our view, as the earnings cycle is turning, foreign investor positioning remains light and domestic liquidity remains strong.”

 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Disregard of governance principles by political leadership should come to an end

Monday, 27 May 2019

In this uncertain world, there is one thing about which Sri Lankans can be absolutely certain. That is, they can be pretty sure that they would wake up every morning to news of gross disregard of good governance principles by the country’s politica


Appointment in ‘Kattankudy’

Monday, 27 May 2019

This essay is an excavation of the roots of mindless rage that burst out of the town of Kattankudy in the Eastern Province. It holds a truth that needs to be told. In his short story ‘Appointment in Samara’, Somerset Maugham retells a 9th Centur


Tawheed is not a misdeed but dirtied by the extreme

Saturday, 25 May 2019

A singular and specific victim of the whole macabre incident of the 21 April Easter Sunday bombings by terrorists in Sri Lanka from a standpoint of Muslims was the maligning, tarnishing and distorting of a term indispensable, necessitous and fundamen


17 things ‘Avengers: Endgame’ teaches us about the state of our superheroes

Friday, 24 May 2019

Art imitates life. Even movies do. Maybe especially so. In these lean times, there’s nothing like a little laughter to stop the press, stem the blood pressure, ease that stress in life. So here goes. Trust you’ll take these tongue-in-cheek. Or pe


Columnists More