The Indian stock markets have risen by almost 25% this year. So, who is investing in these stock markets? As per Wall Street Journal, it is not the Indian domestic investors. In fact, they have mostly stayed away from investing. Most of this rise in stocks has been on account of global money managers. So far this year, foreign investors have invested US$ 22.5 bn into Indian stocks. They have been investing huge sums of money into the initial public offerings too.

The reason for such renewed interest in the Indian economy lies in the series of recently announced policy reforms by the government. Fund managers feel that allowing foreign direct investment in retail and aviation would help these industries in the future. Industry players would earn better profits and they expect stock prices too to move higher. Investors are also pinning hopes on finance minister's objective to reduce budget deficit by lowering fuel subsidies. Not to mention the hope of a more liberal monetary policy from the RBI.