Has China’s Stimulus Influenced FIIs’ Confidence In India’s Long-Term Promise?

Has China’s Stimulus Shaken FIIs’ Confidence in India’s Long-term Promise? Foreign investors have been steadily withdrawing funds from Indian equities, redirecting them into Chinese assets following the recent stimulus package unveiled by China, which has also bolstered its stock market. As of Friday, October 18th, FIIs' net sales exceeded ₹74,000 crore, while domestic institutional investors (DIIs) have offset much of this, purchasing equities worth approximately ₹69,000 crore. Mahesh Nandurkar, Head of Research & MD at Jefferies India, explains that China’s stimulus impacts foreign investors from two perspectives: the equity market and the broader economy. Despite the stimulus being below market expectations, it still influenced a portion of investors to pivot towards China, negatively affecting India to some extent. However, Mahesh Nandurkar emphasizes that India remains a robust long-term growth story, offering more predictability for investors. He highlights that stabilising domestic flows, particularly from equity mutual funds and other local sources, are providing crucial support to the Indian market during this period of volatility. Watch this video to know more.