India's stock market is flourishing. Global investors are back with their capital, giving the main traders in the market plenty of room to maneuver. Under the current conditions, they may gain significant profits. Additionally, this move has boosted the shares of several companies to unprecedented heights.
According to Bloomberg, since the beginning of June, the net purchase of shares by foreign investors has exceeded $4 billion. This more than compensates for the sales of securities in April and May 2024. Analysts believe the influx of funds into India could be explained by the stabilization of the political situation in the country. Previously, investors feared a sharp change in the political landscape, especially after the unexpectedly weak results of Prime Minister Narendra Modi's party. However, the situation has now normalized.
The current events in the stock market have confirmed the opinion of Indian bulls that the national economy and corporate earnings were not affected by the recent elections.
The fact that foreign investors resumed purchasing securities as well as strong domestic flows have contributed to the further growth of the market. From July 1 to 7, the benchmark Nifty 50 index hit a new record high. This was largely driven by the belief that the Indian economy is one of the fastest-growing economies in the world.
"India is one of the few large markets that offer visible growth at a good pace over the next few years, and it is unaffected mostly by global developments," Deepak Jasani, head of retail research at HDFC Securities, said. The expert is confident that a potential rate cut by the Reserve Bank of India will make local stocks even more attractive to foreigners and ensure a significant inflow of funds.
The growing interest in Indian stocks supports this opinion. The reason is the uneven recovery of the Chinese economy and investors' concerns about possible geopolitical risks related to the elections in Europe and the United States.
Along with the return of foreign investors, local institutional market players have also become more active. These include Indian funds and insurance companies, which are injecting new funds into the local market. This year, the Indian stock market has been supplemented by $28 billion. Experts emphasize that this is comparable to the net inflow from global funds amounting to $1.5 billion. At the moment, India's stock market has almost recovered and moved into the green zone thanks to large-scale stock purchases.
