FPIs have been pouring money into the debt market over the past few months following the upcoming inclusion of Indian government bonds in JP Morgan indices. (Representative image)
FPIs had a net investment of Rs 13,347 crore in Indian equities this month (till April 12), according to data from depository institutions.
Foreign investors invested more than 13,300 billion rupees in Indian stocks in the first two weeks of this month, thanks to promising growth prospects and a resilient domestic economy.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said concerns over upcoming changes in the India-Mauritius tax treaty will weigh on foreign portfolio investor (FPI) inflows in the near term until the details of the new treaty become clear.
Another major concern is the rapidly escalating geopolitical situation in the Middle East, with tensions between Iran and Israel rising. He added that this would destabilize markets in the short term.
Domestic institutional investors (DIIs) have huge liquidity and Indian retailers and HNIs are very optimistic about Indian markets, so FPI selling will be mostly absorbed by domestic funds.
FPIs had a net investment of Rs 13,347 crore in Indian equities this month (till April 12), according to data from depository institutions.
However, Friday saw FPIs sell off for Rs 8,027 crore amid fears over changes in the India-Mauritius tax treaty.
Himanshu Srivastava, associate director and manager at Morningstar Investment Research India, said several factors may have helped attract large inflows, including Fitch's downgrade of China's sovereign credit rating outlook to negative from stable due to growth concerns.
He added that expectations of a normal monsoon season this year, which could ease inflationary pressures, and a resilient domestic economy with promising growth prospects also helped attract significant inflows.
Besides equities, FPIs had a net investment of Rs 1,522 crore in debt markets during the period under review.
FPIs have been pouring money into the debt market over the past few months following the upcoming inclusion of Indian government bonds in JP Morgan indices.
They invested Rs 13,602 crore in March, Rs 22,419 crore in February and Rs 19,836 crore in January.
JP Morgan Chase announced in September last year that it would add Indian government bonds to its benchmark emerging market index from June 2024.
This landmark inclusion is expected to benefit India by attracting approximately $20-40 billion over the next 18-24 months.
Overall, total inflows so far this year have amounted to Rs 24,241 billion into equity and Rs 57,380 billion into debt markets.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)