FPIs pump over ₹14,160cr into Indian equities this month
What's the story
Foreign Portfolio Investors (FPIs) have displayed faith in India's equity market by pumping in ₹14,167 crore this month.
The massive inflow comes despite the military standoff between India and Pakistan.
The positive trend comes after a net investment of ₹4,223 crore in April, the first inflow after three months of withdrawal.
Before this surge, FPIs had withdrawn ₹3,973 crore in March, ₹34,574 crore in February and a whopping ₹78,027 crore in January.
Future outlook
Expert predicts further inflow
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, has predicted an increase in FPI inflow into the Indian equity market.
He attributes this to global factors such as a declining US dollar and slowing economies in the US and China.
Domestic factors like high GDP growth, and declining inflation and interest rates are also expected to contribute to this trend.
However, he cautions that debt inflows may remain low during this period.
Market trends
FPI activity in India's equity markets
India's equity markets have witnessed a surge in FPI activity, marking a turnaround from earlier outflows this year.
The positive momentum was driven by favorable global cues and strong domestic fundamentals that boosted investor confidence.
An improving outlook for a potential US-India trade agreement has been one of the key drivers behind this trend.
The weakening of the US dollar and strengthening Indian rupee have also made Indian assets more appealing to global investors.
Investment patterns
FPIs continue to buy Indian equities amid tensions
FPIs have been persistent buyers of Indian equities, purchasing through exchanges for 16 straight trading days till May 8. They bought a total of ₹48,533 crore in this period.
However, they sold ₹3,798 crore on May 9 when the India-Pakistan conflict intensified.
This consistent buying shows strong investor confidence in India's equity market despite external geopolitical factors.