- The global economy, including the United States, is currently facing challenges related to stagflation and high unemployment.
- Tariffs and questioning commitments are causing decline in the global economy. The US economy is noted as enormous and anchored by the dollar.
- New tariffs are affecting global trade flows, while Indian indices track broader global market trends.
FII Outflows and Tariff Impacts Affect Indian Equities Market
What happened
Sharp outflows of $56 billion from Indian equities have occurred over the past two years. This capital movement effectively offsets the cumulative inflows recorded during the previous eight years, leading to near-nil cumulative flows. In the current calendar year, Foreign Institutional Investors have sold $25.6 billion worth of Indian equities year-to-date.
Why it matters
While FII outflows are trending downward, Domestic Institutional Investors have invested a record $177 billion in Indian equities over the past 24 months. This level of domestic investment is 23% higher than the cumulative inflows seen during the preceding eight years.
New tariffs are affecting global trade flows, while Indian indices track broader global market trends. Tariffs and questioning commitments are causing decline in the global economy.