The Indian stock market has become the favourite destination for foreign investors. This is the reason why despite being overvalued, foreign investors are continuously making investments. In the first 27 days of July, around Rs 54 crore was spent every hour in the stock market. What is special is that this is the second consecutive month when foreign investors have spent more than Rs 25,000 crore in the stock market.
Before that, more than Rs 26,000 crore was spent in the month of June. By the way, the figures for July may go over Rs 40,000 crore. If in the last 3 working days of the week or rather after the budget, foreign investors had not withdrawn more than Rs 7,000 crore from the stock market. Let us also tell you how much foreign investors invested in the stock market and how much in the debt market in the month of July.
Foreign investors invested heavily
According to depositories’ data, foreign portfolio investors (FPIs) have invested a net Rs 33,688 crore in equities this month (till July 26). In early June, there was an investment of Rs 26,565 crore in equities. FPIs had withdrawn Rs 25,586 crore from equities in May amid confusion over election results. FPIs had withdrawn over Rs 8,700 crore from equities in April due to concerns over changes in India’s tax treaty with Mauritius and rising bond yields in the US. According to the data, apart from equities, FPIs have invested Rs 19,223 crore in debt and bond markets during the reporting period. FPI investment in the bond market has touched Rs 87,847 crore so far this year.
read this too
Why did you invest?
Amid expectations of continued policy reforms, sustained economic growth and better-than-expected quarterly corporate results, foreign portfolio investors (FPIs) have invested over Rs 33,600 crore in the Indian stock market so far this month. However, FPIs have withdrawn over Rs 7,200 crore from equities in the last three trading sessions (July 24-26) after the government increased the tax on futures and options (F&O) trading and capital gains on equity investments in the Budget. Market experts believe that the Indian stock market is well positioned to attract foreign investments this year. However, due to some developments, there may be some month-on-month fluctuations.
What the experts say
Himanshu Srivastava, associate director of manager research at Morningstar Investment Research India, said India is in a strong economic position. Apart from this, quarterly results of companies have been better than expected. This has improved the balance sheet of the business world. He said that in addition to this, expectations of an interest rate cut by the US Federal Reserve in September have increased.
He said FPI investment will also increase due to rising estimates of India’s Gross Domestic Product (GDP) by the International Monetary Fund (IMF) and the Asian Development Bank (ADB). Bajaj Finserv AMC CIO Nimesh Chandan said India’s stock market and debt or bond market are in a favourable position this year. This should attract foreign inflows into the country. However, some month-on-month fluctuations are likely to be seen.
