MSCI India has posted gains of more than 5% in the last one month despite concerns over QE taper and escalating tensions between Ukraine and Russia. During the same period, MSCI Emerging Markets (0.2%) and MSCI BRICS (-2.49%) showed a subdued performance.
Indian secondary markets have been witnessing inflows in each of the last 20 sessions. FIIs have bought more than $2 billion worth of equities during this period even as emerging market funds saw outflows of another $3.8 billion for the week ended March 5, as per fund tracker EPFR Global. On Wednesday, FIIs bought another $141 million, as per BSE provisional data.
The BSE Sensex touched its all-time high of 22,023.98 points on Monday while the NSE Nifty touched its all-time high of 6,562.85 points on Tuesday. Meanwhile, among Asian emerging markets, the Sensex trades at the highest relative valuations in terms of one-year forward earnings, as per Bloomberg consensus data. The Sensex is currently trading at 16.2-times its one-year forward earnings, also slightly above its long-term valuations average.
Meanwhile, EM funds have seen outflows of $29 billion in the current calendar year. “Redemptions from Asia ex-Japan Equity Funds hit their highest level in over two years,” EPFR Global said in its report.