FPIs inject ₹15,352 crore into Indian equities this July
Foreign portfolio investors (FPIs) have funneled ₹15,352 crore into Indian equities during the initial two weeks of July, as per depository data. This surge is attributed to India's commitment to ongoing reforms, low US Federal rates, and robust domestic demand. Himanshu Srivastava of Morningstar Investment Research India, emphasized that the forthcoming Union Budget will be a crucial event for foreign investors to comprehend the government's economic growth strategies.
June sees ₹26,565 cr investment, reversing May's withdrawal
The recent inflow follows an investment of ₹26,565 crore in June, spurred by political stability and a sharp market rebound. This was a turnaround from May when FPIs withdrew ₹25,586 crore due to election uncertainties and over ₹8,700 crore in April, amid concerns about changes in India's tax treaty with Mauritius and rising US bond yields.
FPIs also invest ₹8,484 cr in debt market
FPIs invested ₹8,484 crore in the debt market during this period, pushing the debt tally to ₹77,109 crore for the year. VK Vijayakumar of Geojit Financial Services noted that while domestic institutional investors (DIIs) have shown consistent growth every month in 2024, FPI flows have fluctuated between buying and selling. He explained, "FPI activity is influenced by external factors like US bond yields and valuations in other markets while DII activity is largely driven by domestic flows into the market."
High returns and falling bond yields attract FPIs
Abhishek Banerjee, founder at Lotusdew, suggested that FPIs have a significant opportunity in India, as they can earn high returns in foreign currency, gain from rising stock prices, and benefit from falling bond yields. However, he also highlighted the challenge for investors in choosing between chasing momentum or opting for value, as Chinese markets are much cheaper. Vijayakumar claimed that better-than-expected results from IT majors suggest a potential for FPIs to buy into these stocks where valuations are not excessive.
