Foreign portfolio investors (FPI) remained net buyers to the tune of Rs 18,456 crore so far in January as global liquidity led to continued investment in emerging markets. According to depositories data, overseas investors pumped in Rs 24,469 crore into equities but pulled out Rs 6,013 crore from the bonds market between January 1-22.
The total net investment during the period under review stood at Rs 18,456 crore. "The inflow into the Indian markets continue as global liquidity leads to more investments in emerging markets like India," said Harsh Jain, co-founder and COO at Groww.
Besides, he said there are indications which suggest that the economic recovery post lockdowns have been better than expected. This will continue to make India an attractive destination for investors.
Giving an overview of other emerging markets, Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities, said that they are also "slowly witnessing positive FPI flows". Few of the emerging markets that have started receiving positive FPIs flows this month to date are: Indonesia ($800 million), South Korea ($320 million), Taiwan ($2.3 billion) and Thailand ($113 million).
In terms of performance in this month to date, most of the emerging markets have delivered positive returns barring few like Indonesia, Thailand, Brazil and Russia, he added. V K Vijayakumar, chief investment strategist at Geojit Financial Services, noted that high delivery-based buying in IT, telecom and private financials indicate FPIs preference for these segments.
Going forward, the inflows are expected to remain strong. "The major factors driving the FPI flows are abundant global liquidity, abysmally low interest rates in the developed world and the market consensus that the ultra-loose monetary policy being followed by the leading central banks will continue in 2021," he added.