FPIs infuse Rs 19,000 cr in equities in November on softening US dollar, inflation


New Delhi: Nearly Rs 19,000 crore has been infused into Indian equities by foreign investors this month, mostly as a result of depreciation of the dollar and stabilizing US inflation trajectory.

This was followed by net outflows of just Rs 8 crore last month and Rs 7,624 crore in September, the depository data showed.

Foreign portfolio investors (FPIs) made net purchases of Rs 51,200 crore in August and about Rs 5,000 crore in July before these outflows. Earlier, in October last year, foreign investors were net sellers of Indian shares for a period of nine months.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, has predicted that FPIs will increase their buying in the near future as US inflation shows signs of calming down and dollar and US bond yields are falling.

Additionally, among the major economies, India’s outlook for income growth is the strongest. However, he continued, valuations are rising. The report shows that between November 1 and November 11, FPIs invested Rs 18,979 crore in equities.

FPIs have sold shares worth a total of Rs 1.5 lakh crore so far this year. FPIs were initially sellers in October, but as a result of a slight improvement in market sentiment, the selling slowed considerably and they made a big comeback in the month of November.

Shrikant Chauhan, head of equity research (retail), Kotak Securities, recently blamed the inflows on the dollar index, global bond yields and moderation in inflation.

“The resilience that the Indian equity markets have shown amid the global turmoil, and the way it has held up against the odds and negative signals in the recent past, has gone unnoticed. Himanshu Srivastava, Associate Director- Manager Research, Morningstar India, said that since the equity market has seen a steady rise in the recent past, foreign investors have not missed out on the potential for returns.

A relatively strong quarterly result also reflects the sentiment that the Indian economy is now more stable than its international peers. Additionally, he continued, the stabilization of the rupee against the dollar would have encouraged FPIs to invest in Indian stocks.

According to Manoj Purohit, Partner and Leader – Financial Services Tax, BDO India, the macroeconomic front, US Fed rates, volatility in crude oil prices, changes in US bond yields and dollar index were instrumental in influencing investor sentiments. .

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