Foreign Investors Optimistic on Indian Markets
Foreign portfolio investors (FPIs) have invested heavily in Indian equities, infusing Rs 15,352 crore in July so far, as per data from depositories. This bullish sentiment is driven by low Federal Reserve rates in the United States and strong domestic demand.
FPIs have also invested Rs 8,484 crore in the Indian debt market as of July 12. The government’s focus on reforms has further boosted investor confidence.
According to Himanshu Srivastava of Morningstar Investment Research India, the upcoming Union Budget is eagerly anticipated by foreign investors to gauge the government’s economic growth plans.
This inflow follows a similar trend in June, where FPIs invested Rs 26,565 crore, supported by political stability and market recovery.
Manoj Purohit of BDO India attributes the optimism to the government’s commitment to reforms and anticipation of a budget focused on economic growth. Better-than-expected earnings reports have also bolstered investor sentiment, Srivastava noted.
While domestic institutional investors (DIIs) have been consistent buyers throughout 2024, FPI activity has fluctuated. This divergence stems from external factors such as US bond yields and valuations in other markets (for FPIs), while DII activity is primarily driven by domestic market conditions, explained V K Vijayakumar of Geojit Financial Services.
