India beats global pack on strong FPI flows in April, shows data

India outperformed all the major global markets in April. Strong inflows from foreign portfolio investors (FPIs), off the back of an improved global risk sentiment and encouraging January-March quarter results, propelled the markets.

The moderation in valuation, following a near-10 per cent correction between December and March, also made investors look at India more favourably.

Notwithstanding a strong showing in April, India is still a straggler on a year-to-date basis. FPIs have invested close to $2.5 billion in domestic stocks in the past two months.

After the latest rally, the Nifty has climbed back to 18,000 levels where it had faced resistance in the past. Analysts believe the upside could be limited from here on out.

“India stays expensive (2023 year-end Nifty target: 18,000). Despite recent underperformance, India is trading at a 70 per cent premium to emerging markets. Also, Indian equities remain expensive relative to bonds. With household flows receding and bank fixed deposit rates rising, we expect valuations to normalise,” wrote UBS in a note. The Swiss bank has an ‘underweight’ stance on India.