Foreign Portfolio Investors (FPIs) Infuse More Than Rs 6,100 Crore into Equities in March Amid Robust Economic Growth and Market Resilience

Foreign Portfolio Investors (FPIs) Show Strong Appetite for Indian Equities, Infuse Rs 6,139 Crore in March

Foreign Portfolio Investors (FPIs) have significantly increased their investments in Indian equities this month, injecting Rs 6,139 crore. This surge follows a modest investment of Rs 1,539 crore in February and a substantial outflow of Rs 25,743 crore in January, as per data from depositories.

"The positive trend in FPI inflows is attributed to factors such as the recent announcement of Q3 GDP growth at 8.4%, and the consistent performance of major Indian corporations," stated Manoj Purohit, Partner and leader at BDO India. Regulatory developments, including the removal of UAE from the grey list and Sebi's proposed easing of disclosure norms for regulated FPIs, have also played a pivotal role in attracting foreign investments.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out three key reasons for the renewed interest in Indian equities: the resilience of Indian markets, declining US bond yields, and robust GDP growth.

While the influx of funds into equities and debt markets remains positive, concerns about high valuations, particularly in the mid and small-cap segments, persist. Vijayakumar emphasized that a correction in these segments may occur soon.

Besides equities, FPIs have also infused Rs 1,025 crore into the debt market. This follows Bloomberg's announcement of including India's bonds in its Emerging Market Local Currency Government Index from January 31 next year. FPIs have been consistently investing in Indian debt markets, driven by the upcoming inclusion of Indian government bonds in the JP Morgan Index.

The anticipated inclusion in global indices is expected to attract substantial foreign investments, benefiting India's economy and currency. Despite fluctuations, the overall trend indicates a favorable investment climate in both equities and debt markets.

April 28, 2024 8:37 p.m. 130

#trending #latest #FPI#INDIA#ECONOMY