Since October of last year, foreign investors’ funds (FPIs) have been outflowing at a rate of more than $1 billion per month. Their equities markets in India saw a whopping 2.46 lakh crore in sales between October 2021 and June 2022.
Foreign investors kept their favourable position on Indian shares and invested over 14,000 crore in the first week of August, despite the weakening dollar index.
In July, Foreign Portfolio Investors (FPIs) made a net investment of about 5,000 crore, according to statistics from depositories.
As of July, FPIs have returned to the sidelines following nine consecutive months of large net outflows, which began in October of 2013. Between October 2021 and June 2022, they sold a staggering 2.46 lakh crore in Indian equities markets.
An analyst at Yes Securities believes that FPI flows would continue to be positive in August as the rupee seems to be recovering and crude oil prices appear to be restricted in a range.”Also, profits story remains good as steady revenue growth is balancing contraction in profit margins,” he said.
There were net infusions of $14,175 million into Indian equity markets during the first week in August, according to statistics from depositories ,Strength has been added to the current market rise by the FPI strategy shift.
“The drop in the dollar index from over 109 last month to below 106 presently is the primary cause for FPI inflows. The tendency may continue, “As Chief Investment Strategist at Geojit Financial Services, Vijayakumar added.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, stated that statements from Federal Reserve Chair Jerome Powell that the United States is presently not in a recession has helped enhance global mood and risk appetite.
According to him, FPIs have been taking advantage of the current slump in Indian equities markets by selecting out high-quality firms.
Sectors including capital goods, FMCG, construction, and energy have seen a rise in the number of FPIs purchasing the products they were once sellers of.
In addition, foreign portfolio investors (FPIs) invested a net sum of 230 crore in the debt market during the month under review.
By Mr. Srivastava’s estimations, short-term patterns have influenced the flows.
The China-Taiwan equation is another area to keep an eye on, as escalating tensions between the two countries might exacerbate geopolitical dangers in the area. That might have a negative influence on the flow, he added.
In addition, there are persistent worries that the United States may enter a recession.. He went on to say that an aggressive rate rise by the US Federal Reserve, or even the prospect of one, might aggravate capital flight from developing nations like India.
Bimal Mardi is a Professional Content Writer. He works in First Santal Broadcast Network TV/ News channel in India. Bimal Maradi writes about Technology, Education and Tech Product Reviews