Global markets
Global Funds Cut India Exposure as AI Boom and Valuations Shift Focus
This 'Insights' piece delves into the recent trend of global funds reducing their exposure to Indian stocks. We explore how the burgeoning AI boom and shifting market valuations globally are influencing investment decisions, leading to significant FPI outflows from India. Foreign investors have pulled an estimated $25 billion from Indian equities, contributing to a 17-year low in foreign ownership of NSE-listed companies. This development highlights a rotation in global capital allocation. While foreign institutional investors (FIIs) have been net sellers, domestic institutional investors (DIIs) have stepped in, purchasing around $60 billion to cushion the impact on the Indian market. The story examines the implications of these valuation shifts and whether a potential reset could eventually make Indian equities more appealing to global investors.
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