New Delhi:
Continuing their buying spree, foreign portfolio investors (FPIs) infused a net Rs 17,722 crore into the Indian markets in November so far amid encouraging domestic and global cues.
According to depositories data, overseas investors pumped in a net sum of Rs 17,547.55 crore into equities and Rs 175.27 crore in the debt segment during November 1-22, taking the cumulative net investment to Rs 17,722.82 crore.
FPIs were net buyers in the preceding two months as well. They infused a net Rs 16,464.6 crore in October and Rs 6,557.8 crore in September into the domestic capital markets (both equity and debt).
However, some experts said FPIs are still wary of increasing their allocation to the Indian markets.
Umesh Mehta, head of research at Samco Securities said, "FPIs have become relatively cautious on India given the high valuations and Nifty hovering near its all-time high levels. Huge divergence between the large and small/midcaps is making them weary to commit further in a big way to the Indian bourses." Also, the expectation of weaker GDP numbers in the coming months, among other factors, is making them "hesitant to invest full throttle", he added.
Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India, said the buying broadly indicates that FPIs continue to build conviction on the Indian equity markets since "positive domestic and global environment has ensured that FPIs are hooked to the Indian equities".
He added that "this trend is expected to continue over the short-term provided there are no surprises and domestic and global environment continue to be conducive." Commenting on the future trajectory of FPI flows, Harsh Jain, co-founder and COO at Groww, said that "for inflows to be very large in quantity, we might have to wait a bit longer or hope for some big economic factors to play out."
Meanwhile, seven of the 10 most valued domestic firms suffered a combined erosion of ₹76,164.3 crore in market capitalisation last week, with TCS taking the biggest knock.
From the top-10 pack, only Reliance Industries Limited (RIL), HDFC and SBI witnessed gains in their market valuation for the week ended on Friday.
Developments surrounding the US-China trade deal, foreign capital inflows and expiry of November series derivative contracts will set the tone for the equity markets this week, analysts said.
Participants will also be tracking the unfolding political situation in Maharashtra, they added.
"Markets are likely to remain lackluster this week. Movements will occur based on news and events that are likely to transpire from the government in terms of economic policies, disinvestment and international geo-political events," said Jimeet Modi, Founder and CEO, SAMCO Securities & StockNote.
Geojit Financial Services' Head of Research Vinod Nair said, "Going ahead, market focus will be on Q2 GDP data."
GDP growth data for the second quarter is scheduled to be released post market hours on Friday.
Various rating agencies have forecast further deterioration in economic growth due to issues like weak consumption and global headwinds. The Indian economy had expanded by 5 per cent in the first quarter of this fiscal.
Markets would also be influenced by factors such as rupee-dollar trend, oil prices and investment pattern by overseas investors.
Indices may also see a bout of volatility when the November series futures and options (F&O) contracts expire on Thursday, analysts said.
"Next week, focus will be on second quarter GDP numbers," said Gaurang Somaiyaa, Analyst, Motilal Oswal Financial Services Private Ltd.