'Macros are improving for India': CIO sees $3 billion bond inflows as key equity signal

Indian bonds have seen over $3 billion in foreign inflows so far in March — a trend that investment officer Gurmeet Chadha says reflects improving macro fundamentals for the country.

“Indian bonds received $3 billion-plus of foreign inflows in March so far. This is a positive sign implying macros are improving for India. A seasoned fund manager once told me – Always track bond markets and currency for sharper insights into equity,” said Chadha, Chief Investment Officer at Complete Circle.

Chadha's remarks come amid a sharp equity market rally. On Monday, the Sensex surged 1,078.87 points to close at a six-week high of 77,984.38. The Nifty gained 307.95 points to end at 23,658.35. Both indices posted intra-day gains of more than 1.5 per cent, lifted by buying in banking, oil & gas stocks, and continued foreign investor interest.

In the last six sessions, the Sensex has rallied over 4,100 points, or 5 per cent, while the Nifty has climbed 1,260 points, or 5.5 per cent. On Friday alone, Foreign Institutional Investors (FIIs) bought equities worth Rs 7,470.36 crore, according to exchange data.

Earlier today, Vikash Khemani, founder of Carnelian Asset Advisors, also weighed in, highlighting the shift in sentiment. “Lot of naysayers got undue attention recently. Just see what 4 days of FII flows have done. Imagine what will 4 years of positive flow will do to Indian markets! Study Japanese Economic Miracle to get glimpse, which took Nikkei to 60 PE,” he said.

“Those who call India expensive will keep missing or will be invested without peace! Best way to make money in India is remain invested for next 10 years. I have conviction, India will be one of the best markets in USD over next 10 years,” Khemani added, while acknowledging that “intermittent corrections” and “bubbles” are part of the normal market cycle.

Experts attributed Monday’s rally to short covering ahead of F&O expiry, strong global cues, and renewed optimism in Indian equities.