FII inflows at seven-month low in India

For­eign insti­tu­tion­al investors’ (FIIs) $1‑billion inflows into Indi­an equi­ties in Sep­tem­ber made it the worst month in terms of over­seas flows seen in the last sev­en months.

The BSE bench­mark Sen­sex end­ed ‑0.03% low­er in Sep­tem­ber after end­ing each of the last sev­en months on a high. How­ev­er, for­eign bro­ker­ages remain upbeat on India.

“India’s vicious eco­nom­ic cycle (between 2010–2013) of slow­ing growth, ele­vat­ed twin deficits and a skewed sav­ings pro­file, was ampli­fied by surg­ing glob­al oil and gold prices, both of which are now in retreat with oil at 17-month lows of ~US$97/bbl. Decel­er­at­ing glob­al oil demand (IEA has down­grad­ed demand esti­mates from 1.3 mmbpd in Jan’14 to 0.9 mmbpd cur­rent­ly) strength­ens the case for a sus­tain­ably low­er oil price. In addi­tion, a decline in coal prices to 5‑year low has fur­ther sweet­ened the invest­ment the­sis for India,” Deutsche Bank said in a report. YTD, FIIs have pumped in near $14 bil­lion in equities.