📷 Image Credits: Mint
Foreign Portfolio Investors (FPIs) have shown a renewed interest in Indian equities after the market stabilized post-poll volatility. The net outflows of FPIs for June 2024 have reduced significantly as they turned net buyers in the cash market. This shift comes after FPIs panic-sold equities worth ₹12,436 crore in a single day on June 4, contributing to a market crash.
Market experts suggest that the return of market stability is evident in the sharp drop of the fear gauge VIX from 27 on June 4 to 12.82 on June 14. With the new Modi-led NDA government back in office, FPIs have shown increased buying interest, trimming the net outflows to ₹3,064 crore as of June 14.
Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Asset Managers, anticipates that the recent stability could lead to minor upgrades in earnings, easing valuation concerns. He also expects the upcoming budget in July to focus on balanced economic growth without impacting fiscal consolidation, aiding in economic recovery.
Manoj Purohit, Partner at BDO India, expresses confidence in India’s growth momentum, expecting FPIs to return to India with positive numbers. Meanwhile, Sunil Damania, Chief Investment Officer at MojoPMS, believes that the continuous inflow of retail money has countered the outflow of FPI funds, contributing to the buoyancy of the Indian market.
Overall, while FPIs remain cautious about high market valuations and await the outcomes of the upcoming budget, the power of retail money continues to play a significant role in the market’s resilience.
