Analysts upbeat on foreign money inflows into India

The domestic equity market has corrected around 7 per cent from its record closing high hit late in January, as foreign institutional investors (FIIs) turn to be net sellers.

The BSE Sensex closed at 27,645.53 on May 19 - down 6.8 per cent from the closing high of 29,681.77 hit on January 29.

FIIs have sold shares worth Rs 11,460 crore in the past 17 trading sessions even as their net investment stood at Rs 42,266 crore during January 1-May 19.

Experts, however, are looking bullish on FII inflows in India.

"Foreign investors have trimmed India positions, but it is still a favourite investment destination despite recent sales," global investment banking company UBS said on Wednesday.

Narendra Modi government's policies, speed of reforms, global risk environment, crude oil prices and monsoon in India are some of the important factors that will drive market sentiments from here onwards.

Nirmal Jain, chairman, IIFL Group is also bullish on global investors. "From a 3-5 year perspective, we are still in a bull-run. It will be wrong to say that the bull-run has ended and a bear phase has started. India still remains a bright spot in global investors' parameters, while many domestic investors who understand the inherent strength of the economy will continue to invest. I believe even this year the markets will perform well unless there is completely policy paralysis or a big global risk-off environment," he said.

(With inputs from Reuters)