Foreign investors have poured in a net sum of Rs 8,634 crore into the capital markets of India. Investors have pumped the amount in the first five trading sessions of April on the back of positive market sentiment. The overseas investors had poured in a net Rs 45,981 crore into the Indian capital markets (both debt and equity) in March. For the 2018-19 fiscal, they were net sellers to the tune of Rs 44,500 crore.
Foreign portfolio investors (FPIs) have put in a net amount of Rs 8,989.08 crore in equities during the period of April 1-5, states the depositories data. On the other hand, they withdrew a net Rs 355.27 crore from the debt markets, which led to an overall capital market investment of Rs 8,634 crore.
According to analysts, both domestic, as well as global factors have triggered the positive change, which is likely to remain for some time.
Himanshu Srivastava, Senior Analyst Manager (Research) at Morning Star, said, "Although India had some domestic concerns in the form of political uncertainty and increase in cross border tension with Pakistan, alleviation in some of these later improved India's prospects."
He added, that improvement in the country's expectations of the formation of a stable government at the Centre and macro-outlook brought foreign money back into the domestic markets.
Srivastava said, "Consequently, foreign institutional investors (FIIs) turned net buyers in the India equity markets to the tune of $7.31 billion cumulatively for February and March."
The US Fed chief, after the January 30 FOMC meeting, globally declared that the "rate hikes are on hold".
Shortly after, while Japan continues with its QE program, the European Central Bank also declared a dovish monetary stance.
Three leading central banks of the world's dovish stance along with the monetary stimulus being administered by the People's Bank of China has resulted in a gush of liquidity through FPI. VK Vijayakumar, chief investment strategist at Geojit Financial Services said that this liquidity is chasing risky assets like emerging market equity.
Vijayakumar added that in the context of the accommodative stance of the leading central banks and the economic slowdown in the developed world, the FPI inflows can be expected to continue moving forward.
With PTI inputs
(Edited by Vivek Dubey)