'FPIs have turned cautious, not bearish'

FOREIGN PORTFOLIO INVESTORS are not turning bearish on India, they are simply turning cautious as geopolitical tensions and volatile crude prices cloud near-term visibility, said Nitin Jain, chief executive and director, Kotak Mahindra Asset Management Singapore.

- FE BUREAU

Jain said global investors are struggling to price risk amid the West Asia conflict. “India has been caught on the wrong side from an energy price perspective... while it is not our war, we are caught into it”

For now, the dominant view among foreign investors is that the conflict is likely to be transient, provided oil remains in the $80-85 range. Jain said a $10 rise in crude typically knocks off 15 basis points from the GDP, a manageable hit for an economy that has consistently surprised on the upside. Corporate earnings, however, may see uneven effects — oil marketing companies could face margin pressure, while refiners, petrochemical players and exporters may benefit from currency and margin tailwinds.