New Delhi September 5 2023: Foreign companies has reversed its previous trend of leaving Indian stocks, setting a new record as India gains favor as an alternative to China. This shift has led to increased valuations in the Indian equity market.
In the year leading up to September 1st, global investors have purchased a net total of $17.2 billion worth of shares in India, effectively compensating for their retreat in 2022. This trend of investment in Indian equities has been ongoing for six consecutive months through August, marking the longest streak since March 2021.
Indian stocks are currently in the midst of a multi-year rally, with the key benchmarks, the S&P BSE Sensex and NSE Nifty 50 Index, poised for their eighth consecutive year of growth. Factors contributing to this appeal include strong corporate earnings, robust economic growth, and political stability, which continue to attract investors, even as they withdraw from other emerging markets in Asia.
The resurgence of foreign investments since March has also bolstered smaller and mid-sized Indian companies, causing them to outperform their larger counterparts. This has resulted in India's market capitalization reaching an all-time high of $3.75 trillion as of Monday.