Indian stock markets have seen an unprecedented surge, as foreign investors have provided mind-blowing inflows of around $14 billion into the country’s equities over the past two months.
Low interest rates in the US, along with the weak dollar, have reportedly sent big capital towards emerging markets such as India, which are expected to provide relatively higher returns.
“The rally was propelled by strong FII [foreign institutional investor] inflows, a good corporate earnings season, and trends from the festive season, which suggests that the demand recovery continues,” brokerage firm Motilal Oswal said in a report seen by business news platform Quartz India.
The S&P BSE Sensex had grown 0.7 percent as of 3:31 GMT in Mumbai. The NSE Nifty 50 Index had also advanced 0.7 percent. Both indexes were set to extend record highs.
In December alone, foreign capital has amounted to about $6.5 billion, marking the second-highest monthly total on record, according to Bloomberg data.
“Investors should stay focused on quality sectors and stocks, and also watch the trend in foreign investor inflows, which is the main factor of the recent rally,” Vinod Nair, head of research at Geojit Financial Services told the agency.
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