Earnings are likely to remain strong in the near to medium term, which, along with valuation re-rating, will drive the stock upside
From being buyers in the domestic equity markets, DIIs appear to be taking some money off the table as equity markets make record highs. Since the beginning of 2022, DIIs have been buying at an average of over Rs 35,000 crore every month. The pace has slowed down from June 2022.
After experiencing net outflows for four consecutive quarters, India-focussed offshore funds and exchange traded funds (ETFs) registered net inflows worth USD 196 million for the quarter ended September 2016.
India's public debt declined marginally to Rs 55.73 lakh crore at the end of March 2016, showing a quarter-on-quarter reduction of 0.04 percent.
In comparison, foreign portfolio investors (FPIs) were net sellers of equities worth Rs 9,963 crore during the same period. However, FPIs were net buyers of equities to the tune of Rs 17,806 crore last year. Before that, they had invested Rs 1 lakh crore in each of the preceding three years.
The June net inflows are second only to Rs 137 billion (USD 3.5 bn) seen in January 2008. Cumulative net inflows of the past 14 months of Rs 1,041 bn (USD 17 bn) have now surpassed cumulative inflows of the preceding 12 years between January 2002-April 2014 (Rs 934 bn) in nominal terms.
Clive McDonnell, Head - Equity Strategy of BNP Paribas says that he expects the dollar to strengthen in 2011 and therefore, sees limited FII flows, given the stronger dollar.