Foreign portfolio investment could return this year

Foreign portfolio investment could come back to the Indian capital market this year on the back of improving macros and outlook, said a report.

With oil price falling, rupee stabilising and developed markets slowing--leading to a dovish US Fed stance and weakening dollar-- as well as hard landing expected for China, 2019 looks relatively brighter and better for India, said the report by Aditya Birla Sun Life Mutual Fund on the 2019 outlook.

A Balasubramanian, chief executive officer, Aditya Birla Sun Life Mutual Fund, said the relief seen in three major global events--the rising oil price, trade wars and rising US Fed rates — is giving a positive outlook to the global economy. With the reduction in oil price and a strengthening rupee, the Indian economy stands to benefit, he said.

“IMF too maintained its positive outlook on India on the back of stable macroeconomic policies and the various structural reforms bearing fruits,” Balasubramanian said.

India’s GDP is expected to grow at 7.3 per cent and 7.5 per cent in the next two years.

With all the indicators favouring India, the probability of India gaining a steady improvement in 2019 is relatively higher as consumption is the engine of the economy. Bank balance sheets are getting rectified. With earning recovery, GST getting stabilised and a further reduction in rates may not only boost consumption but will also increase the overall tax base, Balasubramanian said.