Benchmark indices NSE Nifty 50 and BSE Sensex made new highs on Wednesday, June 28 with the NSE index surpassing the 19,000 mark and the 30-share BSE index jumping above 64,000. Analysts attribute the surge in the domestic stock market to continuous FII/DII inflows, a rise in banking and financial stocks and PM Narendra Modi’s recent visits to US and Egypt. India signed multiple deals, and the positive response received during these visits is expected to have a profound impact on India’s global perception, according to analysts.
Since the election of Narendra Modi’s NDA government, NSE Nifty 50 has jumped 150% and given a CAGR of 10.7%. Analysts further believe that a shift in global mindset about India as a safe investment hub may attract foreign investments, propelling economic growth to new heights.
FPIs shifting to India from China, Korea and Taiwan
“India has emerged as one of the sweet spots as far as investment by FPIs is concerned. They are consistent buyers and have supported the market. At the same time, regular incremental flow from SIP, provident fund & pension fund is also huge. Domestic Institutions and mutual funds are becoming bigger and bigger. We believe that these flows will continue as India should continue to attract FPIs money due to its advantage compared to its peer emerging market economies like China, Korea, or Taiwan. These economies have their own challenges like pollution, geo-political risk etc,” said Mukesh Kochar, National Head – Wealth at AUM Capital Market. He’s bullish over the long term. This month so far, FIIs have invested worth a net of Rs 20,852.88 crore.
Mega India-US deals signed this month
Narendra Modi-Joe Biden’s meeting in the US earlier this month saw several big-ticket announcements aimed at boosting ties between the two countries, ranging from the areas of defence cooperation to space expeditions. The countries signed Artemis Accords – an effort to put humans back on the moon by 2025. US-based Micron Technology will invest up to $825 million to build a new semiconductor assembly and test facility in India. Applied Materials will invest $400 million to establish a collaborative engineering centre in India. Modi-Biden applauded Google’s intent to continue investing through its $10 billion India Digitization Fund, including in early-stage Indian startups. The leaders hailed the signing of an MoU between General Electric and Hindustan Aeronautics Ltd for the manufacture of GE F-414 jet engines in India, for the Hindustan Aeronautics Limited Light Combat Aircraft Mk 2.