Foreign G-Sec selling halves, but oil and global yields pose risks
In October foreign portfolio investors pulled back on their net selling of Indian government bonds and equities compared with September, meaning the outflow pace slowed.
The change matters because foreign money is a major source of liquidity for Indian markets; a slowdown in selling can support prices and lower volatility, but the overall level of inflows remains modest.
Investors should keep an eye on two external risks – the trajectory of crude‑oil prices and the direction of global sovereign‑bond yields – as higher oil costs and rising yields could weigh on corporate earnings and make Indian assets less attractive. Additionally, shifts in political or economic conditions in other emerging markets could redirect capital flows away from India.
Excerpt from Economic Times
Foreign portfolio investors reduced their selling of Indian government securities and equities in October compared to September. Despite this, high oil prices and global yields pose challenges for sustained portfolio inflows. Economists caution that the slowdown may not indicate a definitive change in foreign…Read the original at Economic Times
Key takeaways
- Category: Corporate Action.
- Assessed as a significant, market-relevant update.
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