India Stocks See Revival In Foreign Inflows After Election Shock
Global funds have become net buyers of equities worth Rs 171 crore after buying for most of the sessions in the last seven trading days, according to NSDL data.
Overseas investors are back to buying on Dalal Street, as the return of Narendra Modi-led government for a third time ensured policy continuity after a short blip that shocked the domestic market.
Global funds have become net buyers of equities worth Rs 171 crore after buying for most of the sessions in the last seven trading days, according to data from the National Securities Depository Ltd. In the last seven sessions, foreign institutions poured in over Rs 8,900 crore, as per the provisional data from the National Stock Exchange.
On June 4, Modi's tighter-than-expected election victory caused huge foreign outflows that led to the worst crash in over four years. But the shares rebounded to recoup the losses a few days later.
Stability has returned to the market after a roller coaster ride in the first week of June, as indicated by the sharp fall in the India's volatility gauge, VK Vijayakumar, chief investment strategist at Geojit Financial Services, said in a weekly note. "This fall in India VIX indicates the return of stability and a likely consolidation phase in the market."
According to Vijayakumar, the market's resilience and retail investors' eagerness to buy at every market dip will force FPIs to cut back on their selling, which they did in May.
However, if the market continues to rally, FPIs may again turn sellers in India and into buyers in other markets like Hong Kong, which are very cheap compared to India, he said.
With the global index inclusion looming for the domestic gilts, the overseas inflows into the debt for the month stand at Rs 6,584 crore.
The world's fifth-largest stock market's market value topped $5 trillion for the first time last week. It took India about six months to add the latest $1 trillion in market value, according to Bloomberg.
The equity gauges inched higher to continue their record streak on Wednesday. Shortly after opening, the NSE Nifty 50 rose 0.31% to a fresh high of 23,630.85, and the S&P BSE Sensex rose 0.36% to 77,581.46.
As of 12:26 a.m., the Nifty was trading 1.8 points or 0.01% higher at 23,559.7, and the Sensex was trading 139.7 points or 0.18% higher at 77,440.9.
