New Delhi: After two months of net outflow, foreign investors turned buyers in June, pumping Rs 26,565 crore into Indian stocks, buoyed by political stability and a strong rally in markets.
Going forward, focus will gradually shift towards the budget and Q1FY25 earnings, which could determine the sustainability of FPI flows, said Vipul Bhowar, head of listed investments at Waterfield Advisors.
According to depository data, foreign portfolio investors (FPIs) have made a net infusion of Rs 26,565 crore into stocks this month.
This came after a net outflow of Rs 25,586 crore in May due to poll jitters and over Rs 8,700 crore in April due to concerns over a tweak in India's tax treaty with Mauritius and a rise sustained in US bond yields.
Before that, FPIs made a net investment of Rs 35,098 crore in March and Rs 1,539 crore in February, while they took out Rs 25,743 crore in January.
Net outflow now stood at Rs 3.2 billion for the month, depositories data showed.
Geojit Financial Services chief investment strategist VK Vijayakumar said political stability, despite the BJP not winning a majority on its own, and strong rally in markets helped by continued buying by domestic institutional investors (DII) and aggressive retail buying, has forced FPIs to pivot. buyers in India.
However, FPI's buying has focused on a few specific stocks rather than spreading across the entire market or sectors. This is because FPIs still consider Indian stocks to be overvalued, said Bhowar of Waterfield Advisors.
They are favoring the financial, automotive, capital goods, real estate and select consumer sectors.
"With government stability assured, impressive GDP performance and forecasts, stable consumer price index, ample foreign exchange reserves and robust health of the banking sector, I anticipate a steady and substantial inflow of FPI," said Kislay Upadhyay, small portfolio manager and founder of Fidelfolio.
Additionally, FPIs invested Rs 14,955 crore in the debt market in June. With this, FPIs' investment in the debt market has reached Rs 68,624 crore in 2024 so far.
India's inclusion in the JP Morgan Bond index is positive.
In the long term, this will reduce the cost of borrowing for the government and the cost of capital for businesses. This is positive for the economy and, therefore, for the stock and debt market.
Going forward, focus will gradually shift towards the budget and Q1FY25 earnings, which could determine the sustainability of FPI flows, said Vipul Bhowar, head of listed investments at Waterfield Advisors.
According to depository data, foreign portfolio investors (FPIs) have made a net infusion of Rs 26,565 crore into stocks this month.
This came after a net outflow of Rs 25,586 crore in May due to poll jitters and over Rs 8,700 crore in April due to concerns over a tweak in India's tax treaty with Mauritius and a rise sustained in US bond yields.
Before that, FPIs made a net investment of Rs 35,098 crore in March and Rs 1,539 crore in February, while they took out Rs 25,743 crore in January.
Net outflow now stood at Rs 3.2 billion for the month, depositories data showed.
Geojit Financial Services chief investment strategist VK Vijayakumar said political stability, despite the BJP not winning a majority on its own, and strong rally in markets helped by continued buying by domestic institutional investors (DII) and aggressive retail buying, has forced FPIs to pivot. buyers in India.
However, FPI's buying has focused on a few specific stocks rather than spreading across the entire market or sectors. This is because FPIs still consider Indian stocks to be overvalued, said Bhowar of Waterfield Advisors.
They are favoring the financial, automotive, capital goods, real estate and select consumer sectors.
"With government stability assured, impressive GDP performance and forecasts, stable consumer price index, ample foreign exchange reserves and robust health of the banking sector, I anticipate a steady and substantial inflow of FPI," said Kislay Upadhyay, small portfolio manager and founder of Fidelfolio.
Additionally, FPIs invested Rs 14,955 crore in the debt market in June. With this, FPIs' investment in the debt market has reached Rs 68,624 crore in 2024 so far.
India's inclusion in the JP Morgan Bond index is positive.
In the long term, this will reduce the cost of borrowing for the government and the cost of capital for businesses. This is positive for the economy and, therefore, for the stock and debt market.
