FPIs Inject Rs 9,800 Cr Into Indian Equities On Positive Growth Outlook

Foreign Portfolio Investors (FPIs) have continued their bullish stance on Indian equities, pouring in an impressive Rs 9,800 crore this month so far, driven by robust economic growth and attractive stock valuations.

This development follows a nine-month high investment of Rs 43,838 crore in May, Rs 11,631 crore in April, and Rs 7,936 crore in March, as per data from the depositories.

The recent surge in FPI investments comes after a brief period of withdrawals amounting to over Rs 34,000 crore during the January-February period. Market experts believe that the positive momentum is expected to continue throughout June, as the Reserve Bank of India (RBI) has indicated that interest rates will not be raised in the near term, instilling confidence in equity markets.

But concerns regarding valuation have emerged as Indian markets continue their upward trajectory. Additionally, the possibility of stricter regulatory norms could potentially hinder foreign investments in India to some extent, according to Himanshu Srivastava, Associate Director – Manager Research at Morningstar India.

FPIs made a net investment of Rs 9,788 crore in Indian equities during the period from June 1 to June 9. The influx of funds can be attributed to strong economic growth, comparatively attractive valuations of Indian stocks, and confidence in the government’s policies.

The resilience displayed by the Indian economy amid uncertain times, coupled with its comparatively favorable position among similar markets, has prompted foreign investors to focus on Indian equities.

Within sectors, financials and automobiles are expected to witness continued FPI interest, given the promising outlook for these segments.

Additionally, FPIs invested Rs 592 crore in the Indian debt market during the reviewed period, attracted by the attractive yields offered by Indian debt securities.

Thus far in 2023, foreign investors have injected Rs 39,000 crore into Indian equities and Rs 8,100 crore into the debt market, underscoring their sustained confidence in the Indian economy.