Lates News

Oil price surge and rising global yields have prompted overseas investors to sell Indian assets again, dealing a blow to the recent momentum of foreign capital inflows. Data shows that global funds have net sold $2.1 billion of Indian stocks this month, following two consecutive months of buying. Index-eligible Indian sovereign bonds have also seen outflows, with foreign investors selling $1.1 billion this month, which at the current pace would mark the largest monthly outflow since March. Previously, Indian sovereign bonds recorded record inflows in June. Rising oil prices have weighed on the rupee and intensified inflationary pressures, while India's economy is highly dependent on energy imports, limiting its policy space. Gautam Chhaochharia, head of India global markets at UBS, said oil prices will be the key factor determining whether India sees another round of foreign outflows. UBS expects Indian equities to remain range-bound in the near term, with valuation levels, increased equity supply, and high oil prices likely to cap upside room for the market.