FPIs Mop Up Over Rs 42,000 Crore Worth Of Equities In First Half Of December
Foreign investors have bought Indian equities worth Rs 1,47,705 crore so far this year.
Foreign portfolio investors have invested Rs 42,733 crore in Indian equities in the first 15 days of December after reversing their selling streak in November. The inflows witnessed in December is the highest in four months.
The surge in inflow was witnessed after BJP secured majorities in the Hindi heartland states of Rajasthan, Madhya Pradesh, and Chhattisgarh, which strengthened its position as the dominant party in north India.
The BJP's better-than-expected performance in the assembly polls has substantially reduced the perceived risk for the next year, as it looks highly likely to win the upcoming Lok Sabha election, according to analysts who said in an interview with NDTV Profit.
Investors who have been awaiting clarity are likely to start deploying their money, analyst said, as the sentiment was uplifted by the Bharatiya Janata Party winning three states in polls.
On a macro level, the U.S. Federal Reserve also kept its key interest rate in line with expectations at the latest FOMC meet and signalled three cuts next year. This also led to a decline in U.S. bond yields.
Foreign investors have bought Indian equities worth Rs 1,47,705 crore so far this year, according to NSDL data.
On Friday the benchmark indices closed at a record, ending higher for the seventh consecutive
India is still the largest recipient of FPI flows so far this year among emerging markets. FPIs were sellers in Thailand, the Philippines, Indonesia, Malaysia and Vietnam, according to Bloomberg data.
FPIs heavily bought stocks in banking and IT segments. FPI buying is likely to sustain, going forward, according to Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
India is one of the top investment destinations of FPIs. There is a near consensus now in the global investing community that India has the best prospects among the emerging economies for sustained growth for many years to come, he said.
"This growth has the potential to create phenomenal wealth through the stock market. FPIs are investing to benefit from this potential wealth creation," Vijayakumar added.
"After the inclusion of India in the JPMorgan Emerging Market Bond Index, there is high enthusiasm to invest in Indian government bonds. Some institutions may have already started buying. Now that the U.S. bond yields have corrected significantly, Indian bonds will attract more investment."
Foreign portfolio investment in the domestic debt market hit a six-year high in November, driven by robust yields and the domestic bonds' inclusion in JPMorgan's Emerging Market Global Bond Index.
Foreign portfolio investors have infused Rs 8,937 crore in debt as of Dec. 15, according to data from the National Securities Depository Ltd. The previous highest monthly inflow by FPIs was recorded in October 2017.
