The Indian indices underperformed in the first half of the year, but then bounced back and bounced back in style.
When compared with peers, Indian indices underperformed initially but then the Indian markets turned outperformers. Apart from India, Taiwan as well as South Korea did well.
So, did the foreign institutional investors (FIIs) have something to do with it?
Year to date FIIs are more or less flattish or mild sellers if one looks at the flows from FIIs in 2023, but it's far less than what we saw in entire of 2022 when they sold closer to $7 billion.
If FIIs were sellers how can they play a role in this big pullback?
One needs to divide the data point into two halves - one is the initial performance, when it was underperformance that we saw, at that point of time the FIIs sold close to $4 billion odd. However what happened post that is that they pumped in another $4 billion and that perfectly tallies in with what we have seen, as that's the period when the markets bounced back.
How the FII flow compares with peer groups
South Korea and Taiwan were outperformers earlier and they got the big money. However since March, South Korea flows turned more or less flattish while Taiwanese index saw $2.5 billion of selling and the Indian markets gained most of that with close to around $4 billion of inflows.
So it seems that the FIIs have had an impact on the Indian markets.
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