Global fund managers are renewing interest in Indian equities after two key investment deterrents — elevated oil prices and a weakened Indian rupee — have eased significantly, according to a Reuters report.
A sharp decline in crude oil prices to levels seen before the Iran conflict and measures to stabilise the rupee have reduced macroeconomic concerns that previously prompted foreign investors to cut exposure to Indian markets. As a result, selling by global funds has slowed, and U.S.-listed India‑focused exchange‑traded funds (ETFs) recorded net inflows for the first time in over a month.
Investment managers, including those from M&G and William Blair, are gradually adding to India positions as risk perceptions improve and oil‑related currency pressures abate. However, many investors caution that a long‑term re‑rating of Indian equities will depend on stronger corporate earnings performance in the near term.
Despite growing optimism, some currency strategists remain cautious, with forecasts suggesting the rupee may stay weak against the dollar in coming months even as near‑term pressures ease.
The renewed foreign interest highlights India’s resilience as a key emerging market destination once macroeconomic headwinds such as commodity price spikes and currency volatility recede.
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