In foreign frenzy for Indian stocks, watch dollar returns
Reuters Market Eye - Foreign net inflows into Indian stocks reached 208.1 billion rupees as of January 30, the strongest January since at least 1998 and a seventh consecutive month of net purchases.
The strong buying has cheered domestic investors after Indian stocks attracted foreign net buying of $24.4 billion in 2012, although that came on the back of heavy selling in 2011.
Whether those flows will continue this year has been a big question mark as valuations -- currently at around 14 P/E forwards -- catch up to historic averages of around 16.
Credit Suisse has an interesting take: despite the strong foreign inflows, Indian stock markets ranked 35th out of the 50 largest global markets this year as of January 13 in terms of U.S. dollar returns and 38th over the past 12 months.
Credit Suisse estimates that by mid-February, Indian stocks could rank 42nd on a year-to-date basis and 44th on a 12-month basis.
"This has important lessons in our view: that India's absolute performance is likely the result of a global move into equities, and not so much due to 'cyclical recovery' or 'bottom in earnings'," Credit Suisse writes in a note.
"For the next move up or down, therefore, one must look at global triggers more than domestic ones," it adds.
(Reporting by Rafael Nam)
- Tweet this
- Share this
- Digg this
- UPDATE 2-Concordia finally heads for scrapyard after massive salvage operation
- Seven arrests made in $1.6 million StubHub cyberfraud case |
- Facebook beats Wall Street targets, stock hits record high |
- UPDATE 3-Seven arrested internationally in $1.6 million StubHub fraud
- UPDATE 3-Tanker charge tarnishes Boeing's 2nd-quarter profit
India will not support a trade facilitation protocol ahead of a July 31 deadline unless its concerns about subsidies are met, two senior government officials said on Wednesday, sticking to a hard line critics say could derail a landmark global trade deal. Full Article
Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs Full Article
Jet Airways chairman says looking to restructure debts, talking to bankers Full Article
Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec Full Article