Overseas investors have pumped in close to Rs 5,200 crore in capital markets in first week of the month on positive global cues coupled with government’s reforms agenda.
The net investments by foreign investors in the equity market were Rs 4,412 crore (USD 718 million) from November 3-7, while they infused a net amount of Rs 765 crore (USD 125 million) in the debt market during the period, taking the total to Rs 5,177 crore (USD 843 million), as per the latest data.
Market analysts said that overseas investors (foreign Institutional Investors, sub-accounts or foreign portfolio investors) are betting on hopes that European Central Bank (ECB) may announce stimulus measures to revive growth in Eurozone economies.
Besides, Japan has already announced plan to expand its additional stimulus package.
They believe that some of this excess liquidity will come to India compared to other emerging market countries.
Moreover, foreign investors are betting on India on account of the reforms agenda of the Central government.
Since the beginning of the year, foreign investors have made a net investment of Rs 2.23 lakh crore (USD 37 billion) into the country’s securities market.
This includes a net investment of Rs 86,678 crore in equities and Rs 1.37 lakh crore into debt market.
The strong inflows in the recent months have taken the cumulative net investments of FIIs into India to USD 208 billion, while their investments in rupee terms is Rs 10.14 lakh crore.
This is based on the data since November 1992 when the FIIs began investing into Indian markets and includes about USD 160 billion investments into equities and further about USD 47 billion in debt markets.
From the beginning of June, FIIs (Foreign Institutional Investors) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called Foreign Portfolio Investors.