Growing geo-political concerns have made Indian markets more attractive, at least in short-term, among BRIC nations, say analysts. According to them, foreign flows may top $50 billion by FY15, if the government walks the talk with regards to implementation of key economic reforms.

Benchmark indices rose to their fresh record highs with both the Sensex and the Nifty surpassing its previous lifetimes highs hit back in July. The S&P BSE Sensex hit a fresh lifetime high of 26,406.92 and the Nifty recorded fresh high of 7880.50 in trade on Monday.

The Indian markets have rallied by around 30 per cent in US dollar terms and over 24 per cent in rupee terms so far in the year 2014, largely led by strong inflows by FIIs, which have already pumped in over $26 billion so far in the year 2014.

From an FII perspective, they are really bullish on the Indian economy and rising geo-political concerns have diverted fresh flows to Indian markets from Russia, say analysts.

"It looks like FIIs are turning sellers in Russia on geo-political concerns, which is favouring the Indian markets," he added. Prabhakar expects the Nifty to hit a target of 8500 by the next month-end and 9200 by December-end.

EPFR Global tracks both traditional and alternative funds globally and has $23.5 trillion in total assets. Experts believe that the absolute majority government in India will help attract more foreign investments and reduce bottlenecks in policymaking.

FII flows may top $50 billion by FY15.
Markets have so far rallied on hope and investors are waiting eagerly for implementation of key economic policies by the new government, to revive economic growth. Additionally, macros have improved substantially which also augured well for the Indian Market.

Foreign institutional flows, which are largely responsible for over 24 per cent rally seen in the Indian markets, are showing no signs of slowdown and if the government walks the talk, the flows may top $50 billion by FY15.

India, which was once burdened with the issues of high inflation, rising fiscal deficit and muted economic growth, is back on investment radar of big foreign institutional investors (FIIs) and is no longer part of 'fragile five', say analysts