According to the data from NSE, foreign investors have poured over Rs
1.01 lakh crore into the Indian equity markets since the beginning of
November.To get more news about
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A combination of low interest rates in the US and the weak dollar has led to inflows into emerging markets like India.
Low-interest rates mean the returns on US Treasurys are subdued and
hence foreign investors prefer Indian markets, where the return could be
relatively higher. Driven by the inflow from foreign players, the
Indian equity markets have continued to hit new heights.
Besides the foreign investor inflows, the rally is also attributed to
the good corporate earnings season and trends from the festive season.
Even the big global firms like Morgan Stanley and Goldman Sachs have
turned bullish on India, citing factors such as accommodative monetary
policy, government spending, and peaking out of Covid-19 infections.
Pay attention to potential risks
But there are also a lot of factors that could prick the pricey bubble
of Indian markets. Inflation is still a bone of contention and could
hurt the Indian central banks attempts to keep the rates low. At the
same time, the recovery in demand has been slow with the imports and
credit growth showing signs of weakness.
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