FIIs unlikely to return in large numbers without new growth engines in India: Bernstein
Bernstein's report indicates that Foreign Institutional Investors (FIIs), foreign entities investing in Indian markets, are expected to remain cautious about Indian equities over the coming year. Significant foreign investment inflows will hinge on India's ability to demonstrate new growth engines across various sectors. The analysis suggests a shift in foreign investment patterns, influenced by changing currency valuations and market dynamics, with FIIs showing selective interest rather than broad market participation.
What this means
This implies that foreign capital flows into Indian equities might remain subdued unless clear, new avenues of economic growth emerge. Banks with exposure to capital markets or those reliant on foreign investment for corporate finance activities should anticipate a more selective approach from FIIs. India needs to offer compelling investment narratives beyond traditional sectors to attract substantial foreign funds.
Most affected: Indian equity markets, Investment banking, Corporate lending
Key takeaway: Monitor sector-specific growth indicators and policy initiatives aimed at creating new economic drivers, as these will be key for attracting sustained FII interest.
Get stories like this in your inbox every morning
Free daily brief — rates, RBI updates and the banking stories that matter, in 3 minutes.
More in this briefing
- Deposit per se may not be a binding constraint for credit creation: RBI bulletin
- No ATM charges, banks to operate on Sunday: What initiatives did Centre take to minimise disruptions during 3-day strike
- Centre approves one-time interest-free loan of ₹50,000 per barn for Andhra tobacco farmers — How will credit come?
- RBI cuts time period for export realisation from October 1
- Share of high-value micro loans rise: Report