Locals Driving Indian Stock Market as Foreigners' Influence Ebbs
- Rising flows countering sales by global funds: Deutsche Bank
- Gush of liquidity keeping equity valuations elevated
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Overseas investors’ sway over India’s $2 trillion stock market is waning. Surging flows into mutual funds have placed domestic investors in the driver’s seat, providing a buffer against capital outflows sparked by global shocks, according to Deutsche Bank AG.
The months in which foreigners sold Indian shares between January 2004 and April 2014 led to a median decline of 7 percent in the MSCI India Index, Deutsche Bank AG said in a report this week. Those losses have reduced to less than 1 percent since May 2014, when the shift in household savings toward financial assets started, the brokerage said.