This came following a massive investment of Rs 66,134 crore in December and Rs 9,000 crore in November.
Foreign Portfolio Investors (FPIs) continued their buying spree and poured close to Rs 4,800 crore in the Indian equity markets in the first week of January driven by confidence in the country’s robust economic fundamentals.
Additionally, they injected Rs 4,000 crore in the debt market during the period under review, data with the depositories showed. With expectations of a prolonged decline in US interest rates in 2024, there is an anticipation that FPIs will likely escalate their purchase, particularly in the initial months of the New Year leading up to the general elections, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
Further, FPI inflows into debt will also see acceleration in 2024, he added.
According to the data, foreign investors made a net investment of Rs 4,773 crore in Indian equities this month (till January 5).
This came following a massive investment of Rs 66,134 crore in December and Rs 9,000 crore in November.
The latest flow came amid investors waiting on the sidelines to get further cues on interest rates from the US Fed meeting minutes released last week, Himanshu Srivastava, Associate Director — Manager Research, Morningstar Investment Research India, said.
“India’s domestic investor’s consistent flow, exceptional GDP growth numbers of Q2FY24, strong corporate earnings and good banking health are eye-watering for foreign investors,” Kislay Upadhyay – smallcase Manager and Founder of Fidel Folio, said.
Adding the political stability confidence as generated from state election results in December has created the perfect recipe for a secular bull-run accompanied by FPI inflows, he added.
He further said that investors want to get in as early as possible before the two most major events of the year– Indian general elections and Fed rate cuts.
Overall, the total FPI flows for 2023 stood at Rs 1.71 lakh crore in equities and Rs 68,663 crore in the debt markets. Together, they infused Rs 2.4 lakh crore into the capital market.
The flow in Indian equities came following a worst net outflow of Rs 1.21 lakh crore in 2022 on aggressive rate hikes by the central banks globally. Before the outflow, FPIs invested money in the last three years.
Overall, the total FPI flows for 2023 stood at Rs 1.71 lakh crore in equities and Rs 68,663 crore in the debt markets. Together, they infused Rs 2.4 lakh crore into the capital market.
Bulge bracket FPIs have returned to Indian equity markets with aggressive buying in the last month of 2023 taking benchmark indices to dizzying stratospheric levels.
The sharp up-move in the market in December coincided with the surge in FPI inflows during the month which stood at Rs 58,372 crore, including the investment through the primary market and others the December FPI inflows which stood at Rs 66,134 crores.
Vijayakumar,“The last two months of 2023 has witnessed big investment by FPIs thanks to the sharp decline in US bond yields and declining dollar. FPI inflows which were negative in the three months before December have sharply turned positive in December.”
In December, FPIs were big buyers in financial services and also in IT.
FPIs also bought in sectors like autos, capital goods, oil and gas and telecom.
Agencies