FII flow into Indian equities likely to moderate in FY22: Analysts

Besides India, experts say given the robust broad-based economic recovery, FIIs/FPIs can look towards China. Other emerging markets, they say, are yet to recover from the pandemic-induced sluggishness

After a blockbuster financial year when the foreign flows – considered the movers & shakers of the stock market – into Indian equities hit a seven-year high, the pace of investment could moderate as overseas investors reassess their investment strategy, say analysts. Emerging markets (EMs), including India, they believe, will play second fiddle to the developed market (DM) peers in the short-to-medium term. In the first half of the current fiscal 2021-22 (FY22), rising US yields can take the charm off the EMs, but as US inflation and yields moderate, flows to EMs will pick up.

“Global economic recovery, especially