FPIs continue to bet on Indian equities; infuse Rs 30,600 cr in first fortnight of July

FPIs continue to bet on Indian equities; infuse Rs 30,600 cr in first fortnight of July

Foreign Portfolio Investors (FPIs) continued to pour funds into the Indian equity market without any interruption. In the first two weeks of the current month, they made investments totaling more than Rs 30,600 crore. This significant inflow can be attributed to India’s robust economic growth and impressive corporate earnings.

The positive sentiment surrounding the Indian market has attracted foreign investors, leading them to allocate substantial funds into Indian equities.If the current trend persists, the investment made by Foreign Portfolio Investors (FPIs) in July is projected to surpass the figures recorded in May and June.

In May, FPIs invested Rs 43,838 crore, while in June, they invested Rs 47,148 crore. The consistent inflow of funds indicates strong investor confidence in the Indian equity market. According to data from the depositories, the total inflow into the equity market for this year has reached an impressive figure of Rs 1.07 lakh crore.

This substantial investment from FPIs highlights the attractiveness of the Indian market and affirms their continued interest in capitalizing on India’s economic potential and corporate performance.

Since March, Foreign Portfolio Investors (FPIs) have consistently increased their investments in Indian equities, injecting a total of Rs 30,660 crore into the market as of July 14. This figure encompasses investments made through bulk deals, primary market activities, as well as stock exchanges.

This positive trend follows the withdrawal of Rs 34,626 crore by overseas investors collectively in January and February. Market analysts attribute the continuous buying by FPIs to various factors, including India’s robust economic growth, strong corporate earnings, and relatively competitive valuations of Indian equities compared to other markets.

Sonam Srivastava, Founder of Wright Research, highlighted additional factors contributing to the attractiveness of India’s equity market. These factors include the emergence of a capital expenditure cycle, the revival of Indian manufacturing, and a robust banking sector. Collectively, these factors contribute to India’s compelling investment story, further motivating FPIs to allocate funds to Indian equities.

The consistent inflows from FPIs signify their confidence in the Indian market’s potential and underline the favorable investment environment. The growth prospects, strong corporate performance, and various favorable factors have positioned India as an attractive destination for foreign investors.

According to Divam Sharma, Founder of Green Portfolio, a significant factor driving the inflows into Indian equities is the investments made in Adani group companies. He also highlighted that there is confidence in the US regarding the Federal Reserve’s potential interest rate reversal and minimal chances of a recession in the US. These factors are contributing to a rally in US markets and increasing the appetite for growth markets, including India.

Vijayakumar of Geojit further noted that the decline in the dollar index to below 100, reaching its lowest level in one year, is favorable for emerging markets. India, being the largest recipient of Foreign Portfolio Investment (FPI) flows year-to-date among emerging markets, stands to benefit from this trend.

The combination of investments in Adani group companies, positive sentiment regarding US markets, expectations of interest rate changes by the Federal Reserve, and the favorable impact of a weakening dollar on emerging markets collectively contribute to the ongoing inflows into Indian equities. These factors underline the attractiveness of India as an investment destination for both domestic and foreign investors.

In addition to their investments in equities, overseas investors also infused Rs 1,076 crore into the Indian debt market during the period being reviewed. When it comes to sectors, Foreign Portfolio Investors (FPIs) have continued to show interest in financials, automobiles, capital goods, realty, and FMCG.

The buying activity by FPIs in these sectors has played a significant role in driving up the prices of stocks within these sectors. Consequently, this has contributed to the record highs witnessed in the Sensex and Nifty, the benchmark indices of the Indian stock market. The strong inflows from FPIs and their focus on these sectors have had a notable impact on the overall market performance and investor sentiment.