Foreign investors are still net buyers in the domestic capital markets in June, infusing a total of Rs 11,132 crore on a net basis this month so far, according to depositories’ data.
Foreign portfolio investors (FPI) put in a net sum of Rs 1,517.12 crore into equities and Rs 9,615.64 crore into debt during 3-14 June, the data showed.
The inflows in the debt category are still strong and steady mainly because of positive market sentiment after the re-election of BJP-led NDA government. The rupee stabilizing against the dollar may also have triggered the inflows in debt segment.
Prior to this, FPIs had pumped 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 in the capital markets (both equity and debt).
FPIs have been net buyers since February when the foreign inflows were affected by the dovish stance taken by the central banks globally, while in recent days FPI flows increased after the NDA received a massive mandate, an analyst said.
With election done and euphoria around it quietening, the focus would now be on the steps that the government takes in order to bring the economy back on track, he added.
FPIs would look out for the government’s road map towards fiscal consolidation, fiscal deficit target and the steps it would take to propel economic growth. Also, some profit booking cannot be ruled out, said a market researcher.
Speaking of the global outlook, he added that FPI flows are expected to continue in the light of the sell-off in global bond markets triggered by fears of a global economic slowdown. If there is a trade deal between the US and China, all markets are likely to move up, he concluded.
