Shift of axis from Indian markets: FPIs pivot to China as it unlocks

Rate hikes, elevated valuation, and China reopening lead to reallocation of funds

India’s valuation premium, elevated interest rates, and China’s reopening are leading to the reallocation of funds by foreign portfolio investors (FPIs), say industry observers. So far this month, overseas funds have dumped domestic shares worth nearly $2 billion. China, on the other hand, has received billions of dollars of foreign flows, according to reports. Unlike India, China doesn’t report FPI investments on a daily basis.

According to a Reuters report, foreign investors bought a net 41 billion yuan ($6.06 billion) of Chinese stocks via the China-Hong Kong Stock Connect trading platform so far this year, compared with 90 billion yuan