New Delhi: Foreign portfolio investors (FPIs) continued to show confidence in Indian equities and have infused over Rs 30,600 crore so far in June as they bet on the country’s stable macroeconomic profile and strong corporate earnings outlook.
This comes after a nine-month high of Rs 43,838 crore inflows into equities in May, Rs 11,631 crore in April and Rs 7,936 crore in March, depository data showed. ,ALSO READ: Anand Mahindra’s selfie with NASA astronaut Sunita Williams and Mukesh Ambani is all you need to see today,
Earlier, FPIs had pulled out over Rs 34,000 crore during January-February. ,Bank Holidays July 2023: Banks will remain closed for about 15 days in July, see city-wise list,
Going forward, funds flows may turn volatile, especially after the US Fed reiterated its stance that further interest rate hikes may be needed to bring inflation down to the target, albeit at a slower pace, Shrikant Chouhan, Head Equity Research (Retail), Kotak Securities, said.
Besides, the 50 basis points hike in interest rates by the Bank of England could make investors, especially FPIs, wary, as rising valuations of Indian markets could pose a challenge, he added.
According to the data, FPIs invested a net Rs 30,664 crore in Indian stocks during June 1-23.
Hitesh Jain, Head of Institutional Equities at Yes Securities, said, “FPIs are showing confidence in Indian equities and are pouring money mainly because of India’s stable macroeconomic profile and strong corporate earnings outlook.”
Himanshu Srivastava, Associate Director, Manager Research, Morningstar India, said sentiments have been boosted after the US Federal Reserve put a halt to its rate hike cycle, triggering flows into emerging markets such as India. This shows that FPIs are expecting better growth from Indian markets.
Another factor that has aided the flow to Indian shores is the concern over China’s economic recovery. He said that there is an atmosphere of uncertainty in America and Britain as well.
The flows in recent days could also be passive ahead of rebalancing of MSCI indices, which could lead to additional flows into Indian equities. Apart from equities, FPIs invested Rs 3,051 crore in the debt market during the period under review due to attractive returns offered by Indian debt securities.
So far in 2023, foreign investors have invested over Rs 59,900 crore in Indian equity and about Rs 4,500 crore in debt markets.