The Foreign Portfolio Investors (FPI) have purchase equities worth of 1,766 crore INR and infused 2,178 crore INR in the debt segment between 1 to 18 September, according to the data of depositories. It stands for the total investment of over 3,944 crore INR during the period.
Before September, overseas investors continued to remain net buyers for three sequential months. They lent 46,532 crore INR in August, 3,301 crore INR in July, and 24,053 crore INR in June on a net base. On the FPISs, the Associate Director for market research for Morningstar India (1), Himanshu Srivastava, stated that it could be due to the availability of excess liquidity in the global markets. He added that it is making its way to the equities of India. The flow is also attracted to the Indian market because of the FTSE’s Global Equity Index Asia Pacific ex-Japan and China rebalancing.
Srivastava stated on the debt segment investment that the US Federal Reserve is buying bonds aggressively. The movement has resulted in lower yields in the region. It could be one reason why FPIs are searching for other investment destinations such as Indian debt markets that can offer higher returns.
India as a winning investment destination
The Executive VP and Head of Fundamental Research at Kotak Securities, Rusmik Oza, stated that the FPIs are investing in the Indian markets while under review. The majority of FPIS are consistently selling in emerging markets on international platforms weekly and monthly. Notably, developed markets like Europe and the US have continued to have positive FPI flows. It could have been mostly due to the unattractive level of valuation of other emerging markets, whereas India’s market valuation is still winning, he added.
The Co-founder and COO of Groww, Harsh Jain, stated that there are indications from the US Fed that it plans to keep the interest near zero. At the same time, it is also printing money. Hence, it makes investing money in developed markets such as the US a poor decision. However, it is making emerging markets like India seem winning.