Just over a year ago, India was investors' top pick among EMs. Its slide down the rankings follows $30 billion (over 2.5 trillion) of foreign selling over the past 12-13 months.
Foreign portfolio investors sold stocks worth Rs 1.42 trillion in 2025, with their sales hitting Rs 12,257 crore in the first four trading days of September.
'The frenzy for gold is primarily due to the uncertainty surrounding the tariff war.'
RBI recently hiked LRS limit to $125,000 or Rs 7500,000 as on Aug 19 with $/rupee rate of 60
Most sought-after market of the past few years doesn't feature among top bets in Asia, emerging markets
It has been a choppy calendar year 2022 (CY22) for global financial markets amid the spectre of rising inflation that led most central banks, especially the US Federal Reserve (US Fed), to tighten their monetary policy. Most equity indices across the globe have seen a sharp fall from their respective peak levels in this backdrop. FTSE India, for instance, has corrected 16 per cent from its October peak.
The recent rally in small and midcap (SMID) stocks is not backed by fundamentals and is a case of irrational exuberance, analysts at Kotak Institutional Equities said in a recent report. The fundamentals of most of these companies have, in fact, worsened over the last few months, they noted. Yet, some analysts expect the bull run in these stocks to continue amid intermittent corrections.
'We expect the bull-market phase to still persist, but now led by large-caps which offer better valuation and benefit from FII inflows.'
'We expect continued pressure on midcaps, but any sharp correction looks unlikely from here on.'
'We suggest an equity strategy of 5% to 10% exposure to cash, 5% to Gold ETF, close to 50% to Sensex/Nifty/large mid-cap stocks.'
The Indian markets have seen a good run in the last three months with the S&P BSE Sensex rising around 7 per cent and the Nifty50 moving up 7.5 per cent. The next leg of the market rally from here on, analysts suggest, will be driven by a growth in corporate earnings over the next few quarters. That said, they do not expect material / sharp downgrades to India Inc's earnings estimates despite headwinds for the economy.
So which sectors are likely to do well in 2022? Should you focus on domestic economy-related sectors or export-oriented ones?
Equity strategists are basing their expectation on strong corporate earnings recovery, supportive global economic growth, and gradual improvement in business sentiment.
Markets
Thirteen companies have joined the Rs 1-trillion-plus market capitalisation club this year, so far. This even as the benchmark Sensex has gained less than 3 per cent on a year-to-date basis, underscoring the bullish undercurrent in the broader market. The trend shows a harsh second wave of Covid-19, subsequent lockdowns, and hit to the economic activity has made little dent into India Inc or shareholders' wealth. At the start of the year, there were 29 companies with a market value of more than Rs 1 trillion.
The long-term sustainability of the ongoing market rally is difficult as earnings growth remains a challenge, says Herald Van Der Linde, head of equity strategy, Asia-Pacific, at HSBC.
Markets in countries whose economic fortunes were closely linked to China's growth tumbled.
The regional fallout could continue.
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