FPI funding in September comes after buying to the tune of Rs 16,459 crore in August, with a record Rs 14,376.2 crore investment in the bonds market.
Continuing the buying in Indian markets, foreign portfolio investors (FPIs) pumped in a net sum of Rs 7,605 crore in September so far. According to data from depositories, overseas investors invested Rs 4,385 crore into equities and Rs 3,220 crore in the debt segment during September 1-9. During this period, the total net investment stood at Rs 7,605 crore.
FPI funding in September comes after buying to the tune of Rs 16,459 crore in August, with a record Rs 14,376.2 crore investment in the bonds market. For the continuing gush of foreign money in the debt segment, Himanshu Srivastava, associate director (research) of Morningstar India, said, “The stability in Indian currency and increasing bond spreads between the US and India made Indian debt better placed on the risk-reward basis, which would have caught investor fancy resulting in rather sudden and high inflows.”
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However, he added that how investment in Indian equities has been volatile in recent times. Last week, US Fed Chair Jerome Powell’s address at the ‘Jackson-Hole’ event where he adopted a wait-and-watch approach and highlighted that the central bank is not in a hurry to hike rates, garnered positive reaction from investors and increased their appetite for riskier assets, Srivastava noted.
“FPIs would have chosen to be part of the ongoing rally in the Indian equity markets rather than missing out on it. However, the scenario was slightly different this week. “The uncertainty around the timeline to taper QE (quantitative easing) would have restrained them from going overboard or bring in substantial investments in Indian equities,” he added.
In times to come, Shrikant Chouhan, executive vice-president (equity technical research) at Kotak Securities, said FPI flows are expected to remain volatile during September-December 2021, as global investment continues to remain challenging.
Investors are focusing on the sustenance of growth in developed economies. As a result, they are expected to focus on emerging markets for diversification and India cannot be ignored by global investors given the growth opportunities, he further said.