Low appetite for EMs hurts flows
₹14,295 crore in August, this is the lowest since March. To be sure, India is seen relatively better placed than Asian peers on stable macros and is expected to continue to garner FII money in the near term.
India Inc.’s recently concluded Q1FY24 results season was largely in line with expectations as easing commodity prices aided operating performance. Domestic demand is expected to get a boost from the upcoming festival season, which bodes well for FY24 earnings outlook.
That said, elevated and sticky inflation along with deficit/erratic monsoon are feared to have a bearing on Reserve Bank of India’s interest rate decisions. Plus, in the run-up to the general elections in 2024, FIIs could opt for a cautious stance on India, weighing on the flow trajectory.
Moreover, it does not help that India is an expensive bet. The MSCI India index trades at a one-year forward price-to-earnings multiple of 19 times, a premium to Asian peers, showed Bloomberg data.Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!
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