Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) flows
How are the Indian and global economic environments affecting the financial markets?
Amid net outflows of FII in the last 12 months and slowing of FDI, there could be pressure building up on India’s foreign exchange reserves and the rupee especially should India’s trade deficit widen in the coming months. Other than this risk, the rest of India’s macroeconomic indicators – primarily growth, inflation, interest rates, and the exchange rate vis-a-vis the US dollar and other major currencies – are relatively stable.
What to expect from the markets next week?
While US trade talks with China, the US-North Korea summit, and domestic US politics could impact the US markets next week, their affect on the Indian markets may not be that significant. Indian financial markets could be range-bound and perhaps even flat as there are no major economic indicators expected next week.