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Foreign Money Returns to India Again
Oct 4, 2019

If you remember, after the Union Budget in July, foreign investors began selling. They pulled out a ton of money from Indian equities.

The tax on the super-rich was the culprit. They were uncertain as to how it would impact them. The overall weakness in the economy only made matters worse.

But the month of September has been a different ballgame altogether.

Foreign money once again made its way into Indian equities. For one, the tax on the super-rich was not applicable on domestic and foreign investors. The Finance Minister clarified this.

More importantly, they responded positively to the cut in corporate tax rates. The new rates now, makes India globally competitive. This strengthens the case for investing in India.

Therefore, foreign money flowed back into the Indian markets last month. They bought Indian equities to the tune of Rs 75 billion.

Essentially, there is no clear indicator that the slowdown is structural. So far, it appears cyclical.

Hence, when the cycle turns, the stock markets will move up too.

Data Source: NSDL

This Chart Of The Day was published in The 5 Minute WrapUp - Foreign Money is Chasing Indian Stocks Once Again

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