Foreign investors have begun to price in a slower rebound for Indian stocks this year on concerns that the relatively meagre stimulus the government has delivered for businesses and consumers will leave the economy trailing its main rivals.
Mumbai’s equity indices have bounced about 43% since crashing to a four-year low in March, as the huge flows of cheap capital provided by global central banks when COVID-19 struck made heavily-discounted stocks attractive.
Despite pouring about $1.98 billion into Indian stocks since late March, foreign investors are still net sellers this year with outflows of $2.75 billion. In March alone, they pulled out $8.35 billion, according to stock exchange data.
At the heart of the problem for any economic recovery, investors say, is the pain felt by India’s poor since lockdowns in March stranded millions of migrant workers, or left them to walk home from major cities.