India's Market Rollercoaster: Global Funds Hit the Brakes in January

In January 2025, emerging market funds reduced their allocation to India as the country's equity market faced headwinds. Despite India's strong economic fundamentals, foreign institutional investors (FIIs) pulled out a significant ₹87,374 crore from Indian markets. This outflow was partially offset by domestic institutional investors (DIIs) who injected ₹86,591 crore, demonstrating continued faith in India's growth story. The reallocation comes as India's equity market trades at a growth premium, with stretched valuations prompting investors to be more selective. Experts suggest that a potential market correction in 2025 could present more reasonable valuations, making Indian equities more attractive to global investors.

 

Source: IndMoney, Funds Europe