New Delhi, Feb. 9 -- Foreign outflows from India will reverse only when potential gains for India from its trade pact with the US become clear, according to money managers, even as the joint statement is likely to lift market sentiment.

For now, markets will get a boost from short-covering by foreign portfolio investors (FPIs) on derivatives and some cash buying seen so far this month, they said. Overseas investors have net purchased Indian equities worth Rs.5,908 crore since the trade pact was announced on 2 February, after three months of selling worth Rs.62,338 crore, according to data from the National Securities Depository Ltd.

"The markets have discounted the positive news, but the needle for reversal for FPI outflow will move onl...