Foreign investors have invested a sum of Rs 5,300 crore in the Indian equity markets in the last six trading sessions, mainly on expectations of higher economic growth.
This news comes after an unexpected pullout of Rs 5,264 crore by foreign portfolio investors (FPIs) in January. Prior to that, they had put in Rs 5,884 crore in the stock markets during November-December 2018.
According to the depositories’ data, FPIs put in a net amount of Rs 5,273 crore in equities during February 1-8. However, they pulled out a net sum of Rs 2,795 crore from the debt market during the period under review.
Analysts have said that after turning net sellers in January, FPIs have turned net buyers in February.It has been a welcome change but it is too early in the month to conclude as to where the flows are headed.
A market analyst have reported said that the recent net inflows could be somewhat attributed to the positive view on the Budget and the government has resolved to work towards bringing economic growth.
Despite the recent net inflows, it is believe the broader approach would continue to be cautious and FPIs would continue to adopt a wait and watch approach. The focus will still focus on the country’s progress on the economic growth.
There are factors such as movement in crude prices and currency which could aid the country’s macro-environment but worries over global trade war will continue to guide the direction of FPI flows.
The changing US Fed interest rates will also play a very important role in foreign fund flows.
These foreigner investors turned net sellers in January but net buyers in February with regards to the FPI. It has been received well but its too soon to say the outcome of it.