India Dominates Asian Peers With Highest Foreign Inflows In March
Apart from this, investments from domestic investors have hit a four-year high during the month.
India attracted the highest foreign investment inflows in the Asian market, excluding Japan, in March.
Overseas investors have invested $3.63 billion in the Indian markets during the month so far. Apart from this, investments from domestic investors hit a four-year high in March.
The reported figures of foreign portfolio investment incorporate certain bulk transactions conducted through stock exchanges, which may not accurately reflect the entirety of FPI activity, according to analysts.
Following India, South Korea, Taiwan, and Indonesia experienced significant investment inflows. Investors opted to withdraw funds from Japan, Thailand, Brazil, Malaysia, the Philippines, Vietnam, and Sri Lanka.
South Korea attracted inflows totalling $2.87 billion, Taiwan received $1.14 billion, and Indonesia got $584.5 million.
Conversely, the Japanese market witnessed the largest foreign-institutional-investor outflow of $5.36 billion, with Thailand following at $1.13 billion and Brazil at $977.5 million.
An interesting feature of the FPI in India this financial year is the steady growth in debt investment in sharp contrast to the volatile equity investment, according to VK Vijayakumar, chief investment strategist at Geojit Financial Services Ltd.
An important trend in the market in March was the weakness in the mid and small-caps and resilience in large-caps. This also persuaded the FPIs to reduce selling in large caps and even buy in limited quantities in sectors like banking, telecom and automobiles, Vijayakumar said.
March also marked a notable increase in inflows from domestic institutional investors, with investment reaching the highest level since March 2020. Thus far, the month has witnessed inflows of Rs 52,422 crore.
The Indian markets are effectively absorbing any selling initiated by foreign investors amid a significant uptick in domestic investor participation, according to Enam Holdings Pvt.'s Sridhar Sivaram.
If the emerging markets stabilise and money starts flowing in, the country is expected to get a larger share, the investment director told NDTV Profit in an interview.
Sivaram underscored that the increase in domestic investors' involvement in the market is helping balance out any selling by foreign investors.
