New Delhi, in a strong recovery after the general election results, foreign investors have pumped Rs 12.17 billion into Indian stocks so far in June, mainly driven by expectations of continued political reforms and sustained economic growth .
This came after a net withdrawal of Rs 25,586 crore from stocks in May due to poll jitters and over Rs 8,700 crore in April amid concerns over a tweak in India's tax treaty with Mauritius. and a sustained rise in US bond yields.
With the latest investment, the total outflow now stood at Rs 11,194 crore so far in 2024 (till June 21), depository data showed.
Going forward, Sunil Damania, chief investment officer at MojoPMS, said the entry of foreign portfolio investors (FPIs) will remain limited due to the high valuations currently demanded by the Indian stock market.
The FPI had been waiting on the sidelines for the election results. So far in 2024, barring March (inflow of Rs 35,000 crore), they have been withdrawing from India.
"Although the general election results came as something of a surprise and resulted in a weaker than expected mandate, the markets celebrated that once again a stable government is formed and continuity of government is maintained," said Kislay Upadhyay, administrator of small businesses and founder of FidelFolio.
Furthermore, business confidence remained buoyant and policy continuity added confidence to the markets.
Damania attributed three main reasons for this positive influx.
"First, the continuity of the government guarantees the ongoing reforms. Second, the Chinese economy is slowing, as evidenced by a 12 percent drop in copper prices over the last month. Third, certain block deals in the market have been enthusiastically adopted by FPI," Damania said.
However, these FPI inflows are concentrated in a few select stocks rather than being widespread across the market or sectors.
Additionally, anticipation of a growth-friendly Budget has also lifted investor sentiment, said Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India.
Early trends in FPI activity in June indicate buying in financial services, telecom and real estate and selling in consumer goods, IT, metals and oil and gas, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Additionally, FPIs invested Rs 10,575 crore in the debt market during the period under review, depositories data showed.
Foreign investors have consistently invested in Indian debt in 2024, except in April, with a total investment of Rs 64,244 crore. India's inclusion in the debt index has a positive impact on debt inflows.
"Regardless of short-term changes in flows, we believe India remains an attractive long-term investment destination for global investors," said Nimesh Chandan, CIO, Bajaj Finserv Asset Management Ltd.
This came after a net withdrawal of Rs 25,586 crore from stocks in May due to poll jitters and over Rs 8,700 crore in April amid concerns over a tweak in India's tax treaty with Mauritius. and a sustained rise in US bond yields.
With the latest investment, the total outflow now stood at Rs 11,194 crore so far in 2024 (till June 21), depository data showed.
Going forward, Sunil Damania, chief investment officer at MojoPMS, said the entry of foreign portfolio investors (FPIs) will remain limited due to the high valuations currently demanded by the Indian stock market.
The FPI had been waiting on the sidelines for the election results. So far in 2024, barring March (inflow of Rs 35,000 crore), they have been withdrawing from India.
"Although the general election results came as something of a surprise and resulted in a weaker than expected mandate, the markets celebrated that once again a stable government is formed and continuity of government is maintained," said Kislay Upadhyay, administrator of small businesses and founder of FidelFolio.
Furthermore, business confidence remained buoyant and policy continuity added confidence to the markets.
Damania attributed three main reasons for this positive influx.
"First, the continuity of the government guarantees the ongoing reforms. Second, the Chinese economy is slowing, as evidenced by a 12 percent drop in copper prices over the last month. Third, certain block deals in the market have been enthusiastically adopted by FPI," Damania said.
However, these FPI inflows are concentrated in a few select stocks rather than being widespread across the market or sectors.
Additionally, anticipation of a growth-friendly Budget has also lifted investor sentiment, said Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India.
Early trends in FPI activity in June indicate buying in financial services, telecom and real estate and selling in consumer goods, IT, metals and oil and gas, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Additionally, FPIs invested Rs 10,575 crore in the debt market during the period under review, depositories data showed.
Foreign investors have consistently invested in Indian debt in 2024, except in April, with a total investment of Rs 64,244 crore. India's inclusion in the debt index has a positive impact on debt inflows.
"Regardless of short-term changes in flows, we believe India remains an attractive long-term investment destination for global investors," said Nimesh Chandan, CIO, Bajaj Finserv Asset Management Ltd.
