The trickle has not yet become a flood, but foreign institutional investors have put $1.3 billion into Indian stock markets in the first five trading days of July.
A global risk rally has been sustained despite the end of ultra loose monetary policy in the US, persistent problems in Greece and the policy-induced slowdown in developing economies. The Sensex climbed to a two-month high a day before the local earnings season begins on Friday.
Indian stocks are very unlikely to do wonders in the rest of this year, given the pressure on corporate margins and the political drama in New Delhi. Yet, there are some glimmers of hope. Inflation is likely to peak once the effect of the fuel price hike wears off. Consumer demand has been strong despite higher interest rates. And the conditional clearance to the Cairn-Vedanta deal and the expected green signal to the Reliance-BP one show that decisions continue to be taken. It could have been worse.