‘Sell China, Buy India’ policy of FPIs cannot continue for long

The valuations in China at a PE of 9 is vastly engaging now in comparison with valuations in India with a PE of round 20 and, subsequently, the ‘Sell China, Buy India’ policy of FPIs cannot continue for long, says V.Ok. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

A declining greenback is a robust set off that may maintain the FPI inflows. The concern, nevertheless, is the rising valuations that are getting stretched, he mentioned.

FPI flows into India are persevering with unabated. The decline within the greenback index to beneath 100 on Friday, the bottom stage in a single 12 months, is beneficial to rising markets. India is the most important recipient of FPI flows YTD amongst rising markets, he mentioned.

The promoting in China continues and FPIs have been sellers in EMs like Thailand and Vietnam additionally lately.

In July, via 14th, FPIs have invested Rs 30,660 crore in India. This determine consists of funding via bulk offers and first market, too, aside from funding via inventory exchanges.

FPIs continue to put money into financials, cars, capital items, realty and FMCG. FPI shopping for in these sectors have contributed vastly to the surge in costs of shares in these sectors and the Sensex and Nifty scaling document highs, he mentioned.

(With inputs from IANS)