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Thursday, April 22, 2021

Net buyers for 3rd straight month: Vaccination, growth hopes help keep FPI tap on

According to depositories data, FPIs invested Rs 10,482 crore into equities and Rs 6,822 crore in the debt segment during March.

By: ENS Economic Bureau | New Delhi |
April 5, 2021 5:14:04 am
vaccination, FPI, foreign portfolio investors, Indian markets, grow founder, economy news, business news, indian expressBSE markets down 2700 points on Monday. Temperature scanning in progress outside Bombay Stock Exchange amidst fear of spreading Corona virus. (Express Photo by Nirmal Harindran)

Continuing the buying spree for the third consecutive month, foreign portfolio investors (FPIs) have invested Rs 17,304 crore in domestic markets in March.

According to depositories data, FPIs invested Rs 10,482 crore into equities and Rs 6,822 crore in the debt segment during March.

The total net investment stood at Rs 17,304 crore during the period under review.

Previously, overseas investors had invested Rs 23,663 crore in domestic markets in February and Rs 14,649 crore in January, on a net basis. The rising cases of Covid-19 infections are affecting investments in the Indian markets, Groww co-founder and COO Harsh Jain noted.

Yet, the markets have been relatively much more stable during second wave due to the vaccination drive and economy looking up, he added.

Morningstar India associate director (manager research) Himanshu Srivastava said there was a gush of liquidity in the global financial markets after the US announced a pandemic relief package of $1.9 trillion which flowed into emerging markets like India.

Also, a rejig in some of the global indices led net inflows into Indian equities, he noted.

Besides, expectations of high economic growth, a massive vaccination drive and improvement in earnings growth were few such factors that make India a good investment destination from a long-term perspective, he further said.

Kotak Securities executive vice-president and head (fundamental research) Rusmik Oza said, “On the back of higher growth expectation from US economy some of the export driven emerging markets like South Korea and Taiwan have started witnessing FPI flows … However, the overall, emerging market flows are still below expectation.”

In the future, rising Covid-19 cases in the country could be a dampener. The uncertainty around this could force FPIs to adopt a cautious stance and go into a wait and watch mode, Srivastava said.

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