New Delhi:
Foreign investors remained net buyers in Indian capital markets for a sixth straight month in February, putting in a net amount of Rs 5,177 crore mainly in the debt segment in the month so far, according to depositories data. Foreign portfolio investors (FPI) put in Rs 6,350 crore in the debt segment between February 3-7, the data showed.
However, FPIs pulled out Rs 1,172.56 crore from equities during the period, resulting in a total net investment of Rs 5,177.44 crore.
Indian bourses would track macroeconomic data announcements, developments surrounding the coronavirus outbreak as well as the Delhi poll results for further cues this week, according to analysts.
Industrial production and retail inflation data is due on Wednesday, while WPI inflation numbers will be released on Friday.
Voting for the 70-member Delhi Assembly was held on February 8 and results will be declared on Tuesday (February 11).
"We expect the markets to stay narrow until emergence of greater evidence of growth recovery. Further, it would continue to watch out development over coronavirus. Thus, meanwhile, select sectors with better earnings visibility will continue enjoying valuation premium over the broader markets," said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Investors would also track global market cues amid the coronavirus outbreak.
"Now since the budget, RBI policy and major corporate results are behind us, Indian bourses will henceforth try to adjust and assimilate the reality. Before making any meaningful strides, markets will absorb how these policy decisions have impacted corporates' underlying performance.
"Going ahead, the overhang of coronavirus will largely drive the mood of the stocks in the short term," said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.
On investment in the debt segment, Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India said that it was “largely on the back of RBI maintaining an accommodative stance in its recent monetary policy review, which leaves room for further rate easing.”
Besides, he also added that markets have been overwhelmed by the spread of novel coronavirus and the impact that it could have on the Chinese economy and global growth.
This would have pushed FPIs to maintain a cautious stance on emerging markets like India until more clarity emerges.
Regarding the future course of FPI flows, Alok Agarwala, head research and advisory, Bajaj Capital, said India could continue to attract FPI inflows as “union budget has announced plenty of measures to attract the foreign capital.”
Finance Minister Nirmala Sitharaman said certain government securities will be open for foreign investors, adding that the Centre plans to increase investment limit for FPIs in corporate bonds from 9% to 15%.
Besides, the government also proposed to remove dividend distribution tax (DDT) on companies, and henceforth the tax burden will be shifted to recipients at the applicable rate.
Agarwala also added that once coronavirus gets contained in China, risk-on sentiments will again prevail among the investors and emerging markets including India would continue to attract foreign capital.
Eight of the top 10 valued companies added Rs 1,57,270.8 crore to their total market valuation last week, led by Reliance Industries which gained Rs 31,981 crore, according to market data. Only two companies, Tata Consultancy Services (TCS) and Infosys, took a hit in their market capitalisation (m-cap) for the week ended on Friday.
The m-cap of RIL zoomed Rs 31,981.45 crore to Rs 9,08,888.02 crore, emerging as the biggest gainer among the top-10 firms.
HDFC Bank's valuation jumped Rs 23,503.35 crore to Rs 6,80,391.85 crore and that of HDFC climbed Rs 23,385.05 crore to Rs 4,16,003.19 crore.