What is the smart money doing? FIIs have sold close to 35,000 Crores this month. Are they worried about election outcomes?

The Indian story is powerful. India is still a destination for growth. Oddly, the new government’s finances will be in top shape before the election results are announced. It’s not just the RBI’s dividend aiding fiscal consolidation. The government is expecting more income from spectrum and mine auctions. Because of its proven track record, fiscal prudence could become crucial to policymaking. So the real question is whether FIIs have found merit in other investment ideas.

For starters, FIIs have been investing more in Indian debt than equities. Next FIIs are wary of relative valuations diverging from fundamental traits. Why should mid-cap stocks carry higher valuations than their large-cap peers? Thirdly, domestic equity markets have shown sustained outperformance and momentum. There could be no better time to book profits. Finally, safe haven investments like gold have created value for global investors. There are enough reasons to recalibrate FIIs to recalibrate their investment portfolio. What will convince you?

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