While an obvious answer to my question would be that FIIs are not trying to time the markets, still, any valuation level would be better to enter India than these. Am I wrong in thinking so?
It also leads me to think where they were a year back, or maybe 2 years back. Fine, you might not be able to time your entry into markets at the lowest levels, but surely you would not be crazy enough to enter at levels of PE 24 and above. And their participation is not normal. There are billions being pumped in daily. It’s very strange.
One explanation I can think of is that a lot of the US currency being printed in large numbers is finding its way to India. But is that an explanation enough to explain this crazy FII inflow at such high valuation levels?
Any thoughts?