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Finance Minister cites excess liquidity impacting stocks
Indian Finance Minister Nirmala Sitharaman stated that the weakness of the Indian stock market is due to abundant liquidity and ease of exiting investments, despite the country's economic fundamentals remaining strong. The main market index has declined by approximately 12% since the beginning of the year, accompanied by significant foreign capital outflows, with foreigners selling Indian shares worth over $33 billion since the start of 2023. Meanwhile, domestic inflows into the market have continued, with mutual funds recording positive flows since March 2021. The minister attributed these pressures to global investments shifting toward artificial intelligence markets, and she emphasized that India has not suffered significant damage from the wave of valuations associated with AI, as the country continues to build a domestic tech industry and develop the semiconductor sector.
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