India’s beaten-down largecaps set to rebound on foreign flows

Goldman Sachs, Jefferies and Societe Generale expect Indian large caps to rebound as global funds turn net buyers of Indian equities for a fourth straight week. Large caps now trade at a 25% discount to mid and small caps versus a five-year average of 6%, with Goldman valuing HDFC Bank, Eternal, Power Grid Corp and InterGlobe Aviation as reasonably priced. Foreign investors bought about $1.5 billion of banking and financial-services shares in the two weeks through June 30, after selling more than $12 billion of the sector between January and May.