With foreign investors pressing the ‘exit’ button, Indian investors face a better opportunity to hit ‘the enter’ butt
on.
On several occasions in the past (1992, 2002, 2008, 2011) scepticism ruled the markets as foreign investors exited Indian equities. For those who bought into the markets during such “bad” times, the years to follow turned out to be rewarding.
Over the past few weeks, almost the same scenario has been playing out. Many investors have been distressed by the sharp correction in global oil and equity markets. Nevertheless, there’s no need to worry. Those who invest now in deeply discounted values will likely have a good investor experience when the economy recovers.
The fall in oil price has changed global dynamics and as a result asset allocations made by foreign investors in emerging market assets in 2009-12 are being challenged. Hence, the global and emerging market investment basket, which includes India as well, has seen some changes. This has led to the recent correction.
