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Foreign Investor Bets Show Indian Stocks Rally Has More Legs

  • Overseas funds have pumped in net $3 billion this month
  • Sensex, Nifty 50 likely to climb further from recent records

Overseas investors have stepped up their return to Indian equities, helping power benchmarks gauges to record highs and derivatives data signals more room for the rally.

Global funds have bought a net $3 billion of India stocks so far this month, according to Bloomberg-compiled data. Holdings of foreign investors in long index futures have risen by about six times from their September lows, to 127,000 contracts, while short bets have dropped 76% over the same period to 38,600 lots -- the least bearish positioning since April. The spread between outstanding index futures longs and shorts now stands at its widest since June 2021.