Foreign investors have pumped $4.2 billion in the country’s capital market in May due to finalisation of GST rates for bulk of the items and prediction of a normal monsoon. Interestingly, most of the funds have been invested in the debt markets by the foreign portfolio investors (FPIs). According to latest depository data, FPIs invested a net Rs.7,711 crores in equities last month, while they poured Rs. 19,155 crores in the debt markets during the period under review, translating into a net inflow of Rs. 26,866 crores ($4.2 billion). This comes following a net inflow of close to Rs.94,900 crores in the last three months (February-April) on several factors, including expectations that BJP’s victory in recently held assembly polls will accelerate the pace of reforms. Prior to that, such investors had pulled out over Rs.3,496 crores from debt markets in January. Going forward, there are few challenges but not strong enough to disrupt the current trend. Markets and the rupee are surging higher, which offer a good profit booking opportunity for FPIs. The flow is largely driven by expectation, and for the flows to sustain, the government has to meet those expectation. Monsoon will be another thing to watch out for as it tends to have big economic implications. With the latest inflow, total investment in capital markets (equity and debt) has reached Rs.1.21 lakh crores this year.
FPIs stay glued to Indian market, put in $4.2 billion in May
Date posted: Monday 5 June 2017
Tags: Featured, Indian Economy