FIIs gung-ho on exports, consumption themes, prefer IT and pharma
MUMBAI: Foreign institutional investors (FII) are attracted by the twin themes of exports and domestic consumption. An ET poll of 12 top foreign money managers indicates their preference for
IT and
pharma firms,
whose fortunes have been boosted by the 
cheaper rupee, as well as
consumer goods 
and retail companies,
despite the rich valuations in both
the sectors. 
The possible election of Narendra Modi as prime minister in the 2014 elections will have a positive impact on the economy
and markets, 64% of the poll participants said. Modi, the chief
minister of Gujarat, is the BJP's prime ministerial candidate for the
2014 elections. All those polled believe the US Fed will start tapering from December. A majority of those polled say the tapering, worsening of non-performing accounts (NPA), a rise in the current account deficit (CAD) and sovereign downgrade are the biggest threats for FII flows.
Most participants expect the RBI not to cut interest rates at least till December because of high inflation. Close to 55% of the poll participants said that inflation would remain between 6% and 6.5% in FY14, and 70% said the repo rate would continue at 7.5%. 
The only relief to the Indian economy,
according to the FIIs polled, was the stabilising rupee. A tad less
than half expect the Indian currency to stabilise at 60 against the
dollar by December. If this were to happen, FIIs would be more positive
on India and they may increase their stake in Indian companies.
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