FPI outflows: Don't be complacent with stocks rally; UBS say

FPI outflows: Don't be complacent with stocks rally; UBS says FPI backlash may cut gains


MUMBAI: The Indian equity market has been the third-best performer in all of Asia over the past 12 months with 59 per cent returns, but a fierce second Covid-19 wave could see foreign investors pull out as much as $5 billion in the coming months.
Brokerage firm UBS Securities India reckons that the recent foreign outflows from India could touch the $5 billion mark, as the Indian equity market undergoes a correction due to the risk to earnings growth from the second Covid wave.
“If valuations correct faster, the drawdown might be smaller; but if equity valuations are slow to correct and Covid-19 situation worsens, we could see a larger drawdown,” UBS Securities said in a report.

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