What Will Bring Foreign Portfolio Investors Back to Dalal Street?
· Business · Economic Times
Foreign portfolio investors sold more than Rs 25,000 crore of Indian equities in September, marking the highest monthly outflow in six months. Surging US bond yields, elevated crude prices, and a weaker rupee drove the heavy foreign selling. The US 10-year Treasury yield climbed to 5.34% last week, reaching its highest level since 2002 after a global bond sell-off. Analysts state that a decline in US bond yields, currency stability, cooling oil prices, strong Q2 earnings, and attractive valuations could trigger a return of foreign capital to Indian markets. The exact timeline for when foreign inflows might resume remains unclear.
Why it matters
Heavy selling by foreign portfolio investors directly impacts Indian equity benchmarks like the Sensex and Nifty, while putting downward pressure on the rupee and increasing capital costs for domestic companies.
Read the original report — Economic Times
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