So far this year, FPIs have pulled out over ₹ 1,500 crore from equities and more than ₹ 36,000 crore from the debt market. Photo: Reuters
New Delhi: Foreign investors have pumped over ₹ 7,500 crore into the Indian capital markets so far this month on better corporate earnings coupled with improvement in crude oil prices. The latest inflow follows a net infusion of over ₹ 2,300 crore in the capital markets, both equity and debt, last month. Prior to that, overseas investors had pulled out over ₹ 61,000 crore during April-June.
According to the latest depository data, foreign portfolio investors (FPIs) pumped ₹ 2,409 crore into equities and ₹ 5,168 crore into the debt market during 1-17 August, taking the total to ₹ 7,577 crore.
The inflows can be attributed to the improvement in some underlying factors such as a weakness in crude oil prices and better earnings from India Inc, said Himanshu Srivastava, senior research analyst at brokerage Morningstar. While this helped the market to reach record highs, it would have also prompted FPIs to cash out. “While the underlying factors are positively inclined, the focus of FPIs would be on their sustainability over the long term,” Srivastava said.
“Trump’s stance on not increasing the Fed rate has changed expectations and there is a halt on increasing exposure to US debt,” said Harsh Jain, COO at Groww.in. “Among the emerging markets, India shows significant signs of stability as the IMF forecast has raised its economic outlook on India and the yield on the benchmark bonds has gone up to 7.78% in August. All these factors have attracted investors,” he added.
So far this year, FPIs have pulled out over ₹ 1,500 crore from equities and more than ₹ 36,000 crore from the debt market.