India Market Outlook: FII Flows May Fuel Large Cap Rally As Global Money Returns To Indian Markets

Foreign institutional investor (FII) flows could once again support Indian equities as global allocations begin to shift. Devarsh Vakil, Head of Prime Research, HDFC Securities, says the correction in markets like Korea and Taiwan may lead to a mean reversion trade, improving India's weight in emerging market indices. This could reduce FII selling and bring fresh foreign capital back into Indian equities, particularly large-cap Nifty stocks. He believes large caps may outperform mid- and small-cap stocks as global index-linked inflows return.