📷 Image Credits: Moneycontrol
Foreign investors have made a significant mark in the Indian equities market by infusing Rs 15,352 crore in the first half of July. This influx can be attributed to various factors such as the government’s commitment to ongoing reforms, low US Federal rates, and a strong domestic demand driving positive sentiments. According to data from depositories, foreign portfolio investors (FPIs) have recorded a net inflow of Rs 15,352 crore in equities as of July 12.
This substantial investment follows a previous inflow of Rs 26,565 crore in June, supported by political stability and a sharp rebound in the markets. In contrast, FPIs withdrew Rs 25,586 crore in May due to poll uncertainties and over Rs 8,700 crore in April amid concerns over changes in India’s tax treaty with Mauritius and a rise in US bond yields.
Amidst the positive outlook, the upcoming Union Budget holds significance for foreign investors as they anticipate the government’s plans for economic growth. Himanshu Srivastava, Associate Director – Manager Research at Morningstar Investment Research India, highlighted that the budget announcement is one of the key events being closely monitored by FPIs.
Besides equities, FPIs also channeled Rs 8,484 crore into the debt market during this period, bringing the total investment in debt to Rs 77,109 crore in the year so far. While institutional equity flows have shown an unpredictable trend for FPIs, domestic institutional investors (DIIs), including mutual funds, have showcased more consistent growth throughout 2024.
Experts have noted that FPI activity is influenced by external factors such as US bond yields and global market valuations, whereas DII activity is primarily driven by domestic flows. With the ongoing reform-oriented budget discussions and better-than-expected earnings season, investor sentiment has been on the rise, leading to increased confidence among market participants.
