Foreign investors infused a net amount of Rs 10,384 crore into the Indian capital markets in June and remained net buyers for the fifth month in a row on expectations of continued economic reforms.
Foreign portfolio investors (FPI) invested a net of Rs 2,272.74 crore in equities and Rs 8,111.80 crore in the debt segment, taking the total net investment to Rs 10,384.54 crore in June, according to the depositories' data.
"The net inflows in June emphasises that investors expect the continuation of economic reforms under the (Bharatiya Janata Party) BJP-led government which would propel economic growth. However, the low quantum of net inflows suggests that investors are not yet investing with full conviction and are adopting a wait-and-watch stance before the Budget scheduled on July 5," said Himanshu Srivastava, senior research analyst and manager (research), Morningstar.
So far in 2019, the FPIs have invested a net cumulative amount of Rs 87,313.22 crore since January, the data showed.
Except January, FPIs have been net buyers in 2019 till now and have invested a net Rs 9,031.15 crore in May, Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February into the Indian capital markets (both equity and debt).
"FPI investment, though trending down post March, continues to be positive. So long as the leading central banks continue to be dovish, FPI inflows will continue. As of now, there are no signs of a stance reversal," V K Vijayakumar, chief investment strategist at Geojit Financial Services, said.
Commenting on the outlook, he said, "The FPI into Indian equity will depend on the outcome of Budget to be presented on July 5th. Presently, there is no valuation comfort in the market and the monsoon has been well below the long-term average, which are likely to moderate FPI flows.