Overseas institutional investors have pumped billions of dollars into Indian equities over the past year, fueling a seemingly unstoppable rally, but signs suggest that foreign interest may be peaking, according to analysts.
“Our interactions with 80 investors in the USA suggest FIIs’ (foreign institutional investors) incremental interest in India is near a short-term peak,” Mahesh Nandurkar, India equity strategist at CLSA wrote in a report published on Tuesday.
There is growing unease about weak corporate earnings, says Nandurkar, which will unlikely see a meaningful recovery for a couple more quarters. Furthermore, big-bang reforms including the passage of the land acquisition bill and goods and services tax (GST) bill appear to be some time away, he said.
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