Overseas investors infuse over Rs 12,000 crore in first week of November

Foreign portfolio investors infused a net Rs 6,433.8 crore in equities and Rs 5,673.87 crore in debt segment between November 1-9

Overseas investors remained net buyers in the domestic capital markets with an investment of over Rs 12,000 crore in the first week of November as market sentiments improved following economic reforms by the government. The latest depositories data showed that foreign portfolio investors (FPI) infused a net Rs 6,433.8 crore in equities and Rs 5,673.87 crore in debt segment between November 1-9.

This took the total net investment in the domestic markets (both equity and debt) to Rs 12,107.67 crore.

The latest inflows come after two consecutive months of foreign investments. In October, FPIs invested a net Rs 16,464.6 crore while in September they had put in Rs 6,557.8 crore.

However, Umesh Mehta, head of research at Samco Securities termed the FPI purchases "half-hearted" saying that they invested "an average of Rs 550 crore per day this week which is nothing compared to their aggressive past purchases which tally around Rs 1,500-2,000 crore per day."

"It seems that FPIs are feeling left out and have joined the herd; clearly visible through their halfhearted purchases in Indian markets. FPIs are currently nibbling a few shares just to maintain their asset allocation weights in the portfolio towards Indian equities," Mehta said.

Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India said, mainly the domestic factor led to the foreign inflows.

"Measures announced by the government to boost domestic economy and foreign investment like abolishing super-rich surcharge, cutting corporate tax and recapitalisation of banks has started to pay dividends. Besides, stock markets touching new all-time highs and better than expected earnings growth would have also encouraged investors," he added.

Additionally, US Fed's rate cut on October 30 for third time this year coupled with a reprieve in the US-China trade war, has helped increase risk-appetite among global investors, who are now looking at emerging markets such as India for their investments, Srivastava said.

Harsh Jain, co-founder and COO at Groww said,"We are beginning to see steady inflows from FPIs since a few weeks. However, the recent downgrade of India by Moody's could affect inflows temporarily but not for the long term."

Also read: FPIs remain net buyers for second straight month; infuse Rs 16,464 crore in October

Also read: FPIs ownership in BSE 500 stocks moderated during July-September