In a recent report, JPMorgan has forecasted a significant influx of foreign investment into Indian stocks following the upcoming Lok Sabha elections.
The report highlights the growing confidence of global investors in the Indian economy, particularly in light of anticipated policy continuity under Prime Minister Modi's potential third term.
Rajiv Batra, representing JPMorgan Chase & Co., emphasized that the current positioning of global funds in the Indian stock market indicates a strong interest, with investors poised to capitalize on any market corrections as opportunities to increase their holdings. Batra noted that concerns over stretched valuations ahead of the elections have caused some volatility in overseas flows. However, with the elections on the horizon, foreign investors are expected to refocus on India's growth-driven policies and reforms.
The optimism expressed by JPMorgan aligns with similar sentiments from other financial institutions.
Goldman Sachs Group has also predicted an uptick in foreign inflows, attributing it to Prime Minister Modi's anticipated return for a third term. PM Modi's leadership, characterized by market-friendly policies, substantial infrastructure spending, and a focus on attracting foreign direct investment, is seen as conducive to continued economic growth and market stability.
According to data from the National Securities Depository Ltd., global funds held approximately $763 billion worth of Indian stocks as of February.
Goldman Sachs, in a previous assessment, upgraded India's stock market rating, citing its strategic appeal and strong growth prospects. The investment bank highlighted India's domestically-driven growth story, identifying various "alpha-generating" themes such as Make-in-India initiatives, large-cap compounders, and mid-cap multibaggers.
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