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FPIs net buyers in August, pump in Rs 16,459 cr in Indian markets

FPIs net buyers in August, pump in Rs 16,459 cr in Indian markets

Foreign Portfolio Investors (FPIs) pumped in Rs 2,082.94 crore in equities, whereas debt segment witnessed an inflow of Rs 14,376.2 crore between August 2-31, depositories data revealed

FPIs turned net buyers in August after they remained net sellers in the month of July to the tune of Rs 7,273 crore FPIs turned net buyers in August after they remained net sellers in the month of July to the tune of Rs 7,273 crore

Overseas investors were net buyers in Indian markets in August, infusing Rs 16,459 crore, with the bulk of investment coming in the debt segment. 

Foreign Portfolio Investors (FPIs) pumped in Rs 2,082.94 crore in equities, whereas the debt segment witnessed an inflow of Rs 14,376.2 crore between August 2-31, depositories data revealed. 

The proportion of investment in the debt segment is highest in this calendar year thus far. FPIs turned net buyers in August after they remained net sellers in the month of July to the tune of Rs 7,273 crore. 

Also Read: FPIs net buyers in Aug, pump in Rs 986 cr in equities

Furthermore, foreign investors invested Rs 7,768.32 crore in Indian markets (both equity and debt) in the first three trading sessions of September. 

"The main reason for FPI buying debt is the rising spread between the bond yields in the US and India. The US 10-year is below 1.30 per cent and the Indian 10-year has risen above 6.2 per cent. Also, the stability in INR has brought down the cost of hedging. Expectations regarding the exchange rate also are favourable. At these high valuations in equity risk-reward favour debt," V K Vijayakumar, chief investment strategist at Geojit Financial Service told PTI.

For equities, he said "the momentum in the market and the fear of missing the momentum might have brought FPIs back to equity in August. 

The global scenario also turned favourable with the Fed sending a dovish message that the economy has a lot more ground to cover and rate hikes are far away". 

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Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities, added that the rising pace of domestic vaccinations, a decent GST print for July and a sharp increase in August merchandise trade contributed to market sentiment even as PMI for August weakened. 

On the future of FPI flows, he said India cannot be ignored by global investors considering higher growth opportunities. 

"In the remaining 2021, the global investment continues to remain challenging. The market is focusing on sustenance of growth in developed economies. As a result, global investors are looking on emerging markets to diversify risks," Chauhan said. 

(With inputs from PTI.)