FIIs unlikely to return in large numbers without new growth engines in India: Bernstein
AI Summary
The outlook for foreign institutional investors in Indian equities remains cautious, with Bernstein emphasizing the need for India to enhance its global competitiveness in key sectors like semiconductors and energy storage. Retail investors should be aware that while short-term inflows may stabilize, long-term foreign investment will hinge on India's ability to innovate and attract capital, particularly as high valuations and currency fluctuations weigh on investor sentiment. This highlights the importance of monitoring sectoral developments and government policies aimed at fostering competitive industries.
Foreign investors are unlikely to return to Indian equities in large numbers even after the artificial intelligence trade peaks, with a sustained revival in foreign inflows depending on India’s ability to build globally competitive industries in areas such as semiconductors, batteries and energy storage, Bernstein said in a report.
Bernstein said it expects foreign institutional investor (FII) flows to remain flat to modestly positive over the next 12 months, but cautioned that this would largely reflect easing of recent headwinds rather than a meaningful improvement in the factors that drive long-term foreign investment decisions.
Original Article
Published on Hindu BusinessLine
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