FII inflows to gain traction of economic recovery; gradual reduction of roadblocks
0FII inflows to gain traction of economic recovery; gradual reduction of roadblocks After a massive pull-back of funds from equities, FIIs' inflows are expected to gather strength in 2022 on the back of faster economic recovery in India, analysts opined. Lately, US Fed's tapering measures, high valuations and volatile global environment drove away foreign investors from the equity market. Accordingly, higher interest rates in the US and other developed economies drive away FIIs from EMs such as India. Consequently, FIIs turned sellers in the secondary market, having sold Rs 55,000 crore worth of equities for the full year, they bought heavily in the primary market to the tune of more than Rs 80,000 crore. "Due to reversal of carry trade, we may see outflows from FPIs coinciding with rate hikes by the US Fed. However if India's macros remain steady and micro performance continues to improve, we may see Indian attracting flows from FPIs later in the year at the expense of other markets."