India Inc. is gathering strength; FPIs invested ₹30,772 crore in Indian equities until July 8 this month as overseas investors’ confidence in the Indian economy returned.
This foreign investment has been touched by factors such as the expectation of continued policy reformation, a steady growth rate, and better-than-expected earnings season results.
The optimism is not only confined to equities; it has Todos as the umbrella for all the asset classes that make up its portfolio. Self-sourced information from the depositories indicates that FPIs also invested ₹ 13,573 crore in the Indian debt market until July 19. In the fiscal year to date, the FPIs have invested Rs 82,197 crore in the Indian markets.
Before this, in June, FPIs had bought equities to the tune of ₹26,565 crore on the grounds of clear political sentiments after general elections, as reported by PTI.
Himanshu Srivastava, Associate Director—Manager Research at Morningstar Investment Research India, observed that the enhancement in investor sentiments has also been backed by the “expectation of reform-driven budget.”
Chief Investment Strategist at Geojit Financial Services V K Vijayakumar also expressed the same opinion, saying that further depreciation of the dollar and stability in bond yields also portend FPIs’ repeated purchases in the Indian market. He also stressed that new shifts in the long-term capital gains tax are keenly awaited by domestic and foreign investors, especially in the Union Budget.
Srivastava further added that due to the NDA government’s third consecutive term, market sentiment is upbeat in anticipation of further policy measures and consistent growth. The better-than-expected earnings season has also contributed to building investors’ confidence.
FPIs have emerged as net purchasers in the current month in automobile, healthcare, IT & telecom goods, capital goods, and oil and gas. Nonetheless, in the case of the financial services sector, what Vijayakumar observes is conspicuous by its absence: major buying has not happened, and consequently, performance in the month up to now has been dismal.
The market and people are waiting for the Union Budget and watching the ongoing earnings season; however, fresh inbound capital further assures them that they are upbeat about India’s growth story.
