Overseas investors have pumped in over Rs 2,500 crore in the Indian capital markets in the first week of the month after pulling out hefty funds in the preceding month.
Most of the inflows have been witnessed in the debt markets during the period under review.
According to data available with depositories, Foreign Portfolio Investors (FPIs) infused a net amount of Rs 604 crore into equities during February 1 to 5, while they poured in a net sum of Rs 1,965 crore in the debt market during the same period, resulting in a net inflow of Rs 2,568 crore ($ 380 million).
Prior to that, FPIs had pulled out net Rs 6,245 crore from the capital markets in January.
Capital poured in by FPIs is often referred to as ‘hot money’ because of its unpredictability, although they continue to remain among the most important drivers of Indian stock markets.
According to market experts, statement by Union Minister Venkaiah Naidu expressing hope that key reform bills including GST and Bankruptcy, will get passed in the Budget Session beginning February 23, perked up the investor mood.
In 2015, FPIs had infused a net amount of Rs 17,806 crore in equities and Rs 45,856 crore in bond markets.