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Deutsche bank says fears of foreign institutional investors' capitulation are receding as they have bought Indian shares worth $1 billion over the past eight sessions following Reserve Bank of India governor Raghuram Rajan's recent announcements.
"Recent announcements over the FCNR-B, supportive trade data and easing investment facilitation in debt markets have resulted in imparting long needed and much sought after credibility over both - the financing of the CAD and the actual CAD," says Deutsche bank in a report.
The bank adds since the global financial crisis, bouts of sharp currency depreciation in India have generally been followed by periods of strong FII inflows into equities.
Deutsche advises investors to focus on global recovery plays, rupee depreciation beneficiaries like Hindalco Industries Ltd
