Rs 50 lakh crore gone in bull market disaster! Time for FIIs to come back?
FII selling that has wiped off nearly Rs 50 lakh crore from the Indian stock market ever since the bull market ended less than two months ago is now giving early signs of a U-turn before the Santa rally season begins in December-end.
The pace of sell-off decreased to just about Rs 2,500 crore in the second week of the month after the first week saw foreigners decamping with nearly Rs 20,000 crore.
CLSA has already announced that it will reverse its tactical allocation in early October, returning to a benchmark on China and a 20% overweight on India. And now analysts are expecting that FIIs will reduce their selling as we near the end of the calendar year.
«The new framework established by the RBI and SEBI for reclassifying foreign FPIs as FDIs is expected to positively impact foreign inflows into India. This framework provides greater flexibility for foreign investors and reduces barriers to entry. With the new regulations, FPIs can hold larger stakes in Indian companies without the need for immediate divestment. This creates opportunities for increased foreign investment, particularly in mid-cap companies, and helps attract long-term capital,» said Vipul Bhowar of Waterfield Advisors.
But fresh allocations or significant investments are likely to occur once there is greater clarity on Trump administration's policies.
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