April 5, 2017 / 1:48 PM / 4 months ago

BUZZ-Foreign investors return in force to Indian stocks, Nifty hits record

2 Min Read

** India's Nifty 50 index hit a fresh record high on Wednesday, taking YTD gains to over 18 pct in USD terms and 13 pct in INR terms -- racing past most of other Global EMs and Asia EMs. India vs. EMs: bit.ly/2nJrVFh

** Gains attributable to near record money inflow from foreign and domestic investors

** Morgan Stanley says that India's foreign net inflows saw its highest ever buying (equity+debt) in March ($8.5 bln, previous high $8 bln in Sept'10)

** India has hogged a significant share of the foreign inflows into Asia EM stocks in recent weeks even as the region leaves the last year's "Trump Tantrum" behind

Chart on flows; reut.rs/2p0k1Y0

** Equity saw the highest inflows ($4.6 bln) since Feb'12; Domestic mutual fund inflows remain positive for 11th straight month, taking total equity AUM to a record $83 bln

Chart on Asia EM inflows: reut.rs/2o1YyAq

** Citi analysts say that the demand for Indian equities from foreign investors has been strong over last several weeks and is likely to persist as investors rush to cover underweights built after demonetization

** Nifty 50 top YTD performers: Indiabulls Housing (+52 pct), Yes Bank (+36 pct), Adani Port (+33 pct), Reliance Industries (+31 pct)

** Usual suspects such as Infosys or TCS and pharma -- both more U.S. proxies rather than India-focused assets -- missing from list of current market favourites

** Latest survey of institutional investors in India underscored bullishness, particularly on domestic economy-focused sectors such as industrials

** INR has risen 2.8 pct in March, taking YTD gains to 4.6 pct

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