Foreign Fund Flows into India improved considerably between 1st June to 26th June, however, apprehensions over steep assessments and weak fundamentals continue to exist. An unmatched amount of fiscal and monetary stimulus and slow reopening of economies post lockdown kept sentiment in unharmed worldwide and the Indian markets have been a major recipient of that.
Foreign institutional investors’ (FIIs’) capital inflows into Indian equities stand at $2.87 billion in June, at the peak ever in the year. FIIs have been cautiously distributing money into Indian shares with an inflow of $1.71 billion in the month of May after a huge March-April selloff of $8.42.
This inflow of foreign money also infused Indian markets over 8% higher in the month of June, outshining MSCI Emerging Markets (EM) and MSCI both.
According to Prasanna Pathak, Head of Equity, Taurus Mutual Fund, large easing and printing of money by global central banks have led to rushed of liquidity and money was trying to find its way into various asset classes counting emerging markets like India.