According to Morningstar India, the gradual increase in net inflows suggests that investors are gradually losing their cautious posture and acquiring greater confidence in the Indian markets. Between August 2 and August 27, foreign portfolio investors, or FPIs, purchased 986 crore rupees in stocks and invested 13,494 crore rupees in debt markets, according to depositories data. In August, this amounted to a total net investment of 14,480 crore rupees in India’s capital markets.
FPIs have been net sellers in all months of this fiscal year except June, when they invested 12,974 crore rupees in Indian markets, according to the National Securities Depository Limited. FPIs withdrew Rs 8,836 crore in April, Rs 1,958 crore in May, and Rs 7,410 crore in July.
In terms of other developing economies, Kotak Securities said that flows in South Korea, Taiwan, and Thailand remain negative, amounting to $5,269 million, $855 million, and $41 million, respectively. Indonesia, on the other hand, recorded $156 million in FPI inflows.
Long-term, the Indian equities markets present an appealing investment opportunity. FPIs are concentrating their attention on Indian stocks as the macroeconomic situation improves and the outlook improves.
Furthermore, the lesser likelihood of additional rate reduction as a result of global inflation adds to their concerns.
“With the recent Fed minutes signaling the potential of tapering before the end of the year, markets have become a little more turbulent. With the Dollar Index hovering around 93.57, FPIs are expected to remain on the sidelines for the foreseeable future “Geojit Financial Services’ chief investment strategist, V K Vijayakumar, agreed.