Locals Still Buying But Returns Now Capped

Local retail investors in India are currently cushioning the equity market against massive foreign selling, but slowing inflow growth and stagflation risks are capping returns.

Key Takeaways

• 1.Local retail investors are supporting the Indian equity market through SIPs, acting as a counterweight to heavy foreign institutional selling.
• 2.The pace of growth in domestic inflows is slowing, which is capping market returns and keeping benchmark indices flat to negative YTD.
• 3.Rising stagflation risks, driven by higher energy prices and a potential below-normal monsoon, could eventually trigger a withdrawal by local investors.

Table of Contents

• India
• LOCALS STILL BUYING BUT RETURNS NOW CAPPED
• Stagflation risks could lead to weaker local inflows
• Conclusion
• Authors
• Disclaimer

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