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New Delhi: <keyword id="19900795" type="General" weightage="20" keywordseo="foreign-investors" source="keywords">Foreign investors</keyword> pulled out a massive Rs 94,000 crore (around USD 11.2 billion) from the Indian <keyword id="19925636" type="General" weightage="20" keywordseo="stock-market" source="keywords">stock market</keyword> in October, making it the worst-ever month in terms of outflows, triggered by the elevated valuation of domestic equities and attractive valuations of <keyword id="20295104" type="General" weightage="20" keywordseo="Chinese-stocks" source="keywords">Chinese stocks</keyword>. Before this, foreign portfolio investors (FPIs) withdrew Rs 61,973 crore from equities in March 2020. The latest outflow came after a nine-month high investment of Rs 57,724 crore in September 2024. Since June, FPIs have consistently bought equities after withdrawing Rs 34,252 crore in April-May. Overall, FPIs have been net buyers in 2024, except for January, April and May, data with the depositories showed. Looking ahead, the trajectory of global events like geopolitical developments, interest rate movements, progress in the Chinese economy and the outcome of the US Presidential election will play a crucial role in shaping future foreign investment in <keyword id="20014814" type="General" weightage="20" keywordseo="Indian-equities" source="keywords">Indian equities</keyword>, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said. On the domestic front, key indicators like inflation trajectory, corporate earnings, and the impact of festive season demand will also be closely watched by FPIs as they assess opportunities in the Indian market, he added. According to the data, FPIs recorded a net outflow of Rs 94,017 crore in October. The intensity of net outflows could be gauged from the fact that except for one day, FPIs were net sellers throughout the month, bringing their total investment for 2024 down to Rs 6,593 crore. This relentless selling resulted in about an 8 per cent decline in benchmark indices from their peaks. Several factors contributed towards this massive withdrawal of foreign capital from the Indian equity markets in October. The major among them is the elevated valuations of Indian equities. This has triggered a shift in investments towards China, where valuations are currently more attractive. Additionally, a series of stimulus measures, aimed at bolstering Chinese economic growth has made Chinese equities increasingly appealing to global investors, Srivastava said. Despite the massive FPI selling in financials, this sector is resilient since the valuations are fair and every selling is being absorbed by DIIs and individual investors, particularly HNIs, VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said. In addition, FPIs pulled out Rs 4,406 crore from the debt general limit and invested Rs 100 crore from the debt Voluntary Retention Route (VRR) during the period under review. So far this year, FPIs invested Rs 1.06 lakh crore in the debt market.

FPIs withdraw record Rs 94,000 cr from Indian equities in Oct on attractive Chinese valuations

33 top stocks to buy in a market with few undervalued investments: Morningstar

<ul class="summary-list"><li>AI enthusiasm has rebounded in recent weeks after investors worried about returns over the summer.</li><li>In the next wave of investment, Goldman Sachs analysts recommend "platform" stocks like Microsoft and Datadog.</li></ul>Move over, Nvidia.With artificial intelligence investment rebounding after excitement cooled over the summer, a new set of stocks is set to benefit from the next wave of cash flowing to the burgeoning sector, according to Goldman Sachs.In the next round of AI investment, Goldman Sachs analysts say investors should look past the obvious picks—Nvidia and AI infrastructure companies—and toward a select set of platforms set to build out a direct application of AI."Our equity analysts believe 'platform' stocks, including databases and development tools, are set to be the primary beneficiaries of the next wave of generative AI investments. These platforms allow the best use of AI infrastructure while providing building blocks to construct next generation applications," the analysts said in a Thursday note.The analysts name Microsoft, DataDog, MongoDB, Elastic, and Snowflake as the best-positioned platform stocks as they roll out AI-integrated applications.While many of those platform stocks have plunged this year on near-term fundamental weakness, they have historically low valuations and stabilizing revisions that set them up well as AI investment rebounds, the analysts say.The analysts' recommendations come as investors <a target="_blank" href="https://www.businessinsider.com/nvidia-stock-price-earnings-party-investors-cult-investing-memes-2024-9">remain focused on Nvidia</a> and the companies that build out AI infrastructure, such as semiconductors, cloud providers, and data center REITs. The analysts say the share prices for those stocks will likely continue to increase, but returns will be driven more by earnings than valuations."Expected future returns could be constrained by elevated starting valuations, although valuations are historically a poor near-term signal for large-cap equities," the analysts said, adding that with AI spend surprising less to the upside than before, that could make for more moderate returns for those "phase 2" AI infrastructure stocks.In general, the platform stocks are the exception among other "phase 3" stocks—those with potential to monetize AI by generating incremental revenues like in software and IT services— because the timing of AI monetization is still uncertain.The same goes for "phase 4" stocks, or companies that would benefit from widespread adoption in general since that's likely still years away, the analysts said."We believe the roll-out of applications among Phase 3 stocks is a necessary condition before investors will gain confidence about owning Phase 4 stocks with the largest potential earnings gains from AI-related productivity," they said.The analysts' comments come after flows into AI stocks dwindled over the summer as traders <a target="_blank" href="https://www.businessinsider.com/big-tech-investors-wary-high-ai-spending-markets-selloff-nasdaq-2024-7">expressed worries over returns on big AI spending</a>. That led to sharp underperformance in July, and in early August, Nvidia tumbled as much as 27% from its all-time high in June.Now, the stock is <a target="_blank" href="https://www.businessinsider.com/nvidia-stock-nears-all-time-high-after-openai-funding-2024-10">back up</a> to trading near its record high as the AI trade has reaccelerated in recent weeks amid interest rate cuts from the Federal Reserve and strong macro data.

These stocks are best-positioned to gain in the next wave of AI investment, Goldman Sachs says

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FPIs withdraw record Rs 94,000 cr from Indian equities in Oct on attractive Chinese valuations

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