Foreign investors returned to buying Indian equities for the first time in two months, snapping an eight-week streak of net selling.
The shift in flow direction coincides with a cooling of geopolitical tensions in West Asia and a subsequent moderation in oil prices, which had previously weighed heavily on emerging market sentiment.
Global funds purchased a net of almost $900 million in Indian stocks, marking a significant reversal in capital flows.
Global funds purchased a net of almost $900 million in Indian stocks, marking a significant reversal in capital flows.
The resumption of buying activity suggests that the immediate pressure from elevated energy costs is receding, allowing investors to refocus on domestic fundamentals and valuation metrics that had been overshadowed by the supply-side shock.
The earlier spike in crude prices had threatened to undermine India’s recent stock market rebound, raising concerns over inflationary pressures and current account deficits.
As the oil shock ebbs, the risk premium associated with energy imports diminishes, providing a clearer path for equity performance.