Global funds have been net buyers of Indian equities for 10 straight days, the longest run in nearly a year, as concerns about policy continuity after Prime Minister Narendra Modi's upset at the election rapidly dissipated.
They bought $3.4 billion worth of shares in the period through June 21, data compiled by Bloomberg show. That helped pare this year's outflows that had reached $4.8 billion two days after the June 4 election result showed the ruling party losing its majority in parliament.
The resumption in purchases by foreigners has combined with strong domestic flows to provide a further boost to an already expensive market. The NSE Nifty 50 Index hit a fresh record last week, as investors cheered a commitment by Modi's new coalition for policy continuity in the world's fastest-growing major economy.
"Some of the initial announcements from the new government, including the allocation of ministries, hinted toward policy continuity," said Rajeev De Mello, chief investment officer at GAMA Asset Management SA, based in Geneva, Switzerland. Those signs have removed foreign investors' worries of a weaker mandate, he said.
