Foreign investors have reversed their record exodus from Indian stocks, pouring $17.2 billion into the South Asian nation’s equities this year through September 1st. This influx has more than offset their retreat in 2022 and marks a shift towards India as an alternative to China.

The appeal of India’s stock market is growing, as investors are drawn to its strong corporate earnings performance, robust economic growth, and political stability. This surge of foreign inflows has helped boost India’s market capitalization to an all-time high of $3.75 trillion.

Additionally, foreign investors are now holding a net long position in NSE Nifty 50 index futures, indicating their short-term bullishness on Indian stocks. This marks the first time they’ve held a net long position in these futures since August 1st.

Indian stocks have been on a multi-year rally, with key benchmarks like the S&P BSE Sensex and NSE Nifty 50 Index headed for their eighth consecutive year of advances. This sustained positive performance, along with India’s growing attractiveness as an investment destination, has made it a favored market for global investors.