Stock buying by local India funds in 2023 exceeds foreign inflow

Indian local funds have overtaken foreign investors as the biggest buyers of shares so far this year, helping provide an anchor to the market amid an uncertain global backdrop.

Powered by continued inflows from retail investors, equity purchases by local institutions — including mutual funds and insurers — have climbed to $16.5 billion for the year thus far. Domestic investors plowed money into equity funds for a 31st straight month in September.

In contrast, foreign funds have been trimming their holdings in recent weeks as concern over higher-for-longer US rates dents appetite for riskier assets. As the world’s fastest growing major economy, India has emerged a darling for emerging-market investors in 2023 as sentiment toward China soured, but that buying momentum has weakened of late. International funds turned sellers in September after six consecutive months of purchases and their year-to-date inflows now stand at $14.2 billion.