Indian Stock Market Tops The World… Through Foreign Investments
News reports have come in that show that India’s benchmark index, Nifty, became the top performing index of the world in terms of year-on-year (YoY) and year-to-date (YTD) growth. Nifty went up 45% on YoY and 19% on YTD basis.
While this new high is being commended in the media, it is useful to note that this boost is mainly due to Foreign Institutional Investment (FII). Indian benchmarks shot ahead of developed markets barometer MSCI World Index by 15% YoY and 29% YTD. In 2021, India received a net FII inflow of Rs. 59,010. The perceived recovery of the economy from the COVID-19 pandemic saw strong foreign inflows from October 2020 to March 2021.
Financial Express reported in May that foreign investors were net buyers in the share market from January to March 2021 with total investments in the zone of $7 billion. Here is a graphic that shows foreign ownership of top performing companies listed on Nifty.
This shows that while the share market may be showing a record high, it is mostly due to foreign investments and does not necessarily signal the improved health of Indian businesses or the economy.
While this new high is being commended in the media, it is useful to note that this boost is mainly due to Foreign Institutional Investment (FII). Indian benchmarks shot ahead of developed markets barometer MSCI World Index by 15% YoY and 29% YTD. In 2021, India received a net FII inflow of Rs. 59,010. The perceived recovery of the economy from the COVID-19 pandemic saw strong foreign inflows from October 2020 to March 2021.
Financial Express reported in May that foreign investors were net buyers in the share market from January to March 2021 with total investments in the zone of $7 billion. Here is a graphic that shows foreign ownership of top performing companies listed on Nifty.
This shows that while the share market may be showing a record high, it is mostly due to foreign investments and does not necessarily signal the improved health of Indian businesses or the economy.
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