Foreign portfolio investors (FPIs) have returned to the Indian market amid expectations of an interest rate cut by the US central bank, the Federal Reserve. In the first two weeks of December, FPIs in Indian stock markets netted Rs. 22,766 crore has been invested. Earlier in November, FPIs from the Indian market raised Rs. 21,612 crore and in October Rs. A massive withdrawal of 94,017 crores was made. October's withdrawal figures were the worst.
An interesting fact is that in September FPI inflows were Rs. 57,724 crore had reached a nine-month high. This shows volatility in the investment attitude of foreign investors. According to depository data, FPI investment in shares so far in 2024 with fresh inflows at Rs. 7,747 crore has happened.
Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said, “Going forward, the inflow of foreign investors into Indian stock markets will depend on several key factors.
It includes policies implemented by Donald Trump as President, current inflation and interest rate conditions, and geographic location. Apart from this, the third quarter results of Indian companies and the country's progress on the economic growth front will also play an important role in guiding investor sentiment, he said.
According to depository data, FPIs have inflowed net Rs. 22,766 crore has been invested. This is because it is believed that the US central bank will cut interest rates. Waterfield Advisors Senior Director (Listed Investments) Vipul Bhovar said the Reserve Bank of India (RBI) has increased liquidity by reducing the Cash Reserve Ratio (CRR), which has boosted investor sentiment.
Apart from this, consumer price index (CPI) based inflation has decreased from 6.21 percent in October to 5.48 percent in November. This has raised hopes among investors that the Reserve Bank of India (RBI) will cut the repo rate in the next monetary policy review.
During the period under review, FPIs issued bonds under the normal limit of Rs. 4,814 crore has been invested. At the same time, it has withdrawn Rs 666 crore from the Voluntary Retention Route (VRR). So far this year, FPIs have invested Rs. 1.1 lakh crore has been invested.
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