A recent report by Goldman Sachs suggests that the phase of foreign selling in Indian equities may be over. The report highlights improving domestic fundamentals and the low overseas investor exposure as factors that could attract foreign capital back into the Indian market. Despite geopolitical tensions in West Asia causing market volatility, investor sentiment towards Indian equities is predicted to become more positive.
The analysis anticipates that the Nifty 50 index could reach 26,500 by June 2027, indicating a potential 10% increase from current levels. This forecast represents a shift from Goldman Sachs’ previous outlook in May, where Indian equities were deemed less attractive compared to North Asian markets. The report also notes that global funds have been underweight on Indian equities, leaving room for increased allocations if confidence in the domestic recovery strengthens.
While concerns such as earnings downgrades and valuations persist, the report suggests that a clearer outlook on India’s economic revival might prompt investors to anticipate a turnaround sooner. The report also mentions that earlier worries about the impact of artificial intelligence on the Indian equity market had dampened investor interest. Foreign institutional investors have recently turned net buyers in July, injecting Rs 15,157 crore into the market.
