Priyanka Tiwari
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Suspense crime, Digital Desk : After a nervous six-month period where foreign investors pulled their money out of India, a significant turnaround occurred in April and May 2024. Global investors, led by the United States and Ireland, have renewed their confidence in the Indian market, injecting over $1.66 billion (Rs 13,875 crore) back into the country's equities.
This resurgence marks a sharp reversal from the previous six months (October 2023 to March 2024), when political uncertainty surrounding the general election prompted a massive selloff totaling nearly Rs 1.13 lakh crore. Investors were cautiously waiting on the sidelines to see the outcome.
With the election concluded and a stable coalition government in place, that uncertainty has lifted. Analysts believe this clarity has paved the way for foreign capital to return, driven by India's strong long-term economic prospects.
Who's Buying and Who's Selling?
The new wave of investment was spearheaded by the United States, which invested a net Rs 10,234 crore. Ireland and Singapore followed, contributing Rs 8,242 crore and Rs 5,471 crore, respectively.
Interestingly, this inflow happened even as some other major players continued to sell. Mauritius recorded the largest outflow, pulling out Rs 13,828 crore, followed by Norway (Rs 6,211 crore) and the Netherlands (Rs 3,083 crore). The net positive figure shows that the new buyers outweighed the sellers, signaling a decisive shift in market sentiment.
Why the Renewed Optimism?
Market experts point to India's robust economic fundamentals as the primary attraction. With a strong GDP growth forecast, a favorable demographic profile, and continued policy momentum, India remains a top destination for emerging market investors. The election results, while not a landslide, provided the political stability needed for investors to look past short-term jitters and focus on the country's long-term growth story.
Sectors like financials, consumer discretionary goods, industrials, and real estate are expected to be the biggest beneficiaries of this returning foreign investment, as they are closely tied to India's domestic growth. This turnaround signals a powerful vote of confidence in the Indian economy's future.
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