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More Foreign Investors Look For Investments In Indian Shares

By SiliconIndia   |   Wednesday, July 23, 2014
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BANGALORE: India which is now considered to be the second fastest growing economy after China has recently seen some positive foreign institutional investor inflows that are driven by the sound fundamentals and growth opportunities.

Riding on huge expectations from the incoming Modi Government, many of the global investors are dependent on the Indian economy which is expected to witness more increases in foreign investment inflows, reports Business Standard.

But the increasing foreign portfolio investors in Indian equities could affect their ability to raise bets on blue-chip names which might benefit from the uptick in the economy.

 Many sectors like consumer discretionary, financials and industrials have been used by the foreign investors according to a strategy report from the institutional equities division of Kotak Securities.

 The report, authored by Saifullah Rais said, “We believe further sector rotation in the blue-chip segment may be hindered due to foreign ownership constraints."

"Based on average annual foreign institutional investor (FII) inflows, top-tier industrial stocks may be inaccessible within a year. Although the CNX Nifty Junior constituents may provide some incremental access to the industrials sector, foreign investors have already used about 70 per cent of the FII limit,” reports Business Standard.

“GEM funds are OW (Overweight) India and have been raising their OW in India constantly. Investors believe the Indian growth story clearly stands out amongst the EM (emerging market) universe.

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