New Delhi: Foreign investors infused close to Rs19,000 crore in Indian equities so far this month, primarily due to moderating trend in the US inflation and softening of the dollar. This came following a net outflow of just Rs8 crore last month and Rs7,624 crore in September, data with the depositories showed. Prior to these outflows, Foreign Portfolio Investors (FPIs) were net buyers in August to the tune of Rs 51,200 crore and nearly Rs 5,000 crore in July. Before that, foreign investors were net sellers in Indian equities for nine months in a row which started in October last year. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, believes that FPIs are likely to buy more in the coming days as inflation in the US is showing a moderating trend, and dollar and US bond yields are declining. Also, India has the best earnings growth outlook among large economies. However, valuations are getting stretched, he added. According to the data, FPIs invested Rs 18,979 crore in equities during November 1-11. So far this year, the total outflow by FPIs in equities has reached Rs 1.5 lakh crore. FPIs were sellers in October initially but the sell-off slowed dramatically on the back of some improvement in the sentiments in global markets and they came back strongly in the month of November. Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, attributed the recent inflow to the softening of inflation, global bond yields and dollar index.
“The resilience that Indian equity markets have displayed amid the global turmoil, and the way it has held up against odds and negative cues in recent times have not gone unnoticed. “As the equity markets have surged relentlessly in recent times, foreign investors have returned to not miss out on the return potential that it offers,” Morningstar India Associate Director – Manager Research Himanshu Srivastava said.
Also, the Indian economy is now perceived to be on a more solid ground compared with its global counterparts, which is also reflected in a rather strong quarterly result.Â