LONDON (Reuters) – Most foreign investors in the Indian stock market have decided to sit out current volatility in the belief that rewards will justify the risks, according to delegates at an Indian hedge fund conference.
India’s economic growth potential is as strong as it was before the recent equity price tumble and investors should keep faith with the market, they said.
The drop in Indian stocks from all-time highs – 28 percent since May 11 – has raised questions about whether India’s economic and earnings growth potential has been overestimated.
“I’m confident the present hiccup is more of a correction in a sustainable long-term path towards a mature economy,” said Christoph Avenarius, a senior hedge fund analyst at Credit Suisse, told Reuters on Tuesday.
The sell-off was triggered by panic reaction to a number of factors including stock price falls around the world, the possibility — later denied — that India’s government may tax income from stock investments, and higher benchmark Indian interest rates
