(Bloomberg) -- The world’s worst coronavirus outbreak in India has triggered an exodus of global funds from the nation $2.75 trillion equity markets this month. Still, the benchmark index is on course for its best weekly advance since early February, thanks to local help.
Domestic institutional investors, including mutual funds and insurance companies, brought shares worth $1.3 billion this month through Wednesday, buffering net outflows of overseas funds totaling a similar amount as of April 28. It’s the second straight month of local net buying, while foreign withdrawals are on course for the most since March last year, when India’s government imposed what were among the world’s strictest stay-at-home orders to curb community transmissions of Covid-19.
The benchmark Sensex index added almost 4% this week through Thursday, even as a total of 18.38 million virus cases make India the second-worst afflicted country globally. Brokerage CLSA expects daily virus cases to peak in June, analysts wrote in a note dated April 28.
“Domestic buying can be attributed to the investors, as well as the fund managers, taking a call that the virus situation may not turn out to be as bad for the economy as in the previous wave,” said Deepak Jasani, head of retail research at HDFC Securities Ltd.
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