Ashutosh Joshi

Global investors returned to India’s financial stocks after a three-month selling streak, as the central bank’s recent measures to draw foreign capital ease funding constraints for lenders.

The renewed interest reflects growing confidence that the Reserve Bank of India’s recent incentives for banks to raise foreign-currency deposits will improve liquidity.

India’s rally in equities had been broadening, luring foreign flows

RBI measures are so far proving less effective than they were in 2013.

Foreign funds’ bearish contracts remain close to last year’s record levels.

Foreign investors poured more than $1 billion into Indian equities last week, with Goldman Sachs Group Inc. predicting further inflows as a stable currency and improved earnings expectations prompt funds to add to their holdings.

India’s renewed push to replace critical imports with locally manufactured products is creating a new cohort of stock market winners.

Maharashtra State Electricity Distribution Co., the power distribution company in India’s richest state, has shortlisted six investment banks for a planned initial public offering that could raise between $500 million and $1 billion, people familiar with the matter said.

Student protests in India’s capital, a political headache for Prime Minister Narendra Modi, aren’t reflecting in the country’s financial markets.

RBI said that the economy remains resilient, with the immediate risks stemming from renewed uncertainty in the Middle East and a deficient monsoon that has delayed crop sowing.