Foreign flows into India drying up: Macquarie
Reuters Market Eye - Flows into India likely to remain limited in the near term, as relative valuations of stocks versus emerging markets do not look attractive, Macquarie says.
India thus "may be staring at a possible negative 12 month forward returns," Macquarie says.
The controversy over taxation for foreign investors, as well as macro challenges, are key reasons for net outflows of foreign institutional investors (FIIs) in April vs strong Jan-March inflows, Macquarie says.
Indian stocks look historically cheap, but is trading at a premium of around 33 percent vs emerging markets vs the long-term average of 27 percent, Macquarie estimates.
Nifty is seen trading in 5,000 to 5,500 range and the Sensex in 16,000 to 18,000 range, as "global liquidity glut" to provide some support, Macquarie says.
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Prime Minister Narendra Modi came to office with a reputation as a business-friendly leader ready to open up one of the world's biggest markets and sweep away the remnants of the country's socialist past. Full Article