ALBAWABA — Indian shares were relativity muted on Monday as investors waited for inflation data for clues on the central bank's interest rate position and corporate earnings reports.
India’s stock benchmarks approached record highs on Friday as the Nifty closed at 18349.7 points, 1.38% away from its record of 18,604.45, while the Sensex closed at 61,795, just 0.7% shy of its high of 62,245.43.
The Nifty is trading above 22 times FY23 earnings, according to V.K. Vijayakumar, chief investment strategist at Geojit Financial Services.
As the Indian stock market looks poised to extend its lead over world peers and finish 2022 on a high, foreign institutional investors bought over $487 million of equities on Friday, while domestic investors bought to the tune of $75.8 million, according to National Stock Exchange data.
Foreigners bought $2.5 billion worth of Indian stocks so far this quarter after racking up $6 billion in the previous three months, while local investors plowed about $1.1 billion into stock funds in October, marking a 20th straight month of net inflows.
“Amidst the noise of markets around the world today, India is sending the right signals,” Vikas Pershad, a fund manager for Asian equities at M&G Investments (Singapore) Pte, told Bloomberg.
“There remains much to like about the opportunity set in India, whether judged in absolute or relative terms. The probability that we see of continued outperformance is high,” Pershad added.
With the global economy battling historically high levels of inflation, slowdown in growth and rising energy prices India appears to be an oasis.
“Given all the problems we see in markets globally, India is a safe haven,” Tushar Pradhan, chief investment officer at HSBC Asset Management India told Bloomberg.
“When you hit that sort of range, which happened to China 20 years ago, the next 10-20 years is a period of significant income growth,” added Pradhan.
According to a recent Morgan Stanley India report, there are drivers in place that will make India the world’s third-largest economy and stock market before the end of the decade.
