New Delhi, May 24 -- The relative outperformance of Indian equities compared to other markets may make foreign investors cautious, said Chris Wood in his latest edition of the Greed & Fear report.

Dedicated emerging market (EM) foreign investors, Wood noted, may no longer be 'overweight' on India given a combination of sustained outperformance and strong domestic inflows prompting a potential shift in foreign investor sentiment. However, Chris Wood continues to have a positive structural view on India's domestic demand cycle.

Another reason for the foreign investor outflows, as per Wood, is that expensively valued midcaps are continuing to outperform blue chips, leading to a scenario where portfolios of many FPIs are underperforming.

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