Foreign investors have poured in a net amount of Rs 38,211 crore in the domestic capital markets in March so far, mainly on account of improved global liquidity. In February, foreign portfolio investors (FPIs) had put in a net amount of Rs 11,182 crore in the capital markets -- both debt and equity.
Analysts attributed the increase in infusion to a shift in stance on monetary policy outlook by various central banks globally. According to depository data, foreign investors pumped in a net sum of Rs 27,424.18 crore in equities, while the debt market saw a net infusion of Rs 10,787.02 crore during March 1-22 -- taking the total to Rs 38,211.20 crore.
As per Harsh Jain, chief operating officer of Groww, the cooling of US-China trade war and no hike in interest rates by the US Fed has made India attractive to FPIs. Other factors like stable crude oil prices have also helped. After a shaky start this year, FPIs have made a "confident comeback" into the Indian equity markets, noted Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India.
"In January, the US Fed announced a pause in rate hike, followed by China and European Central Bank providing stimulus for their economy. This bolstered the risk-on sentiments resulting in foreign flows taking a U-turn and to make their way back into emerging markets like India," Srivastava said. Improvement in the country's macro outlook as well as expectations of formation of a stable government post elections has improved India's prospects, he added.