FPIs invest Rs 33600 crore in equities in July amid continued policy reforms good earnings season: After the change in capital gains tax in the budget of the year 2024, foreign investors i.e. FPIs The attraction towards the Indian stock market has decreased. Foreign investors sold shares worth over Rs 7,200 crore in the last three trading sessions (July 24-26) after the government raised taxes on futures and options trading (F&O) and capital gains from equity investments in the Budget. Their total investment in the Indian stock market so far in July has been Rs 33,600 crore. Apart from shares, foreign investors have invested Rs 19,223 crore in the debt market i.e. bond market so far this month.
According to the data of the depository, foreign investors have invested Rs 33,688 crore in shares till July 26 this month. Earlier in June, FPIs had invested Rs 26,565 crore in shares. At the same time, due to confusion about the elections, foreign investors withdrew Rs 25,586 crore from the stock market in May. Due to changes in India’s tax treaty with Mauritius and concerns about rising bond yields in the US, FPIs withdrew more than Rs 8,700 crore from shares in April. Earlier, FPIs had made a net investment of Rs 35,098 crore in shares in March and Rs 1,539 crore in February, while in January they withdrew Rs 25,743 crore. Overall, the total investment of foreign investors in the Indian stock market this year has reached Rs 36,911 crore.
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According to the data, FPIs have invested Rs 19,223 crore in the debt or bond market in addition to shares during the period under review. Earlier in June, foreign investors had invested Rs 14,955 crore in the bond market. In May 2024, FPIs had invested Rs 8,761 crore. In April this year, FPIs had withdrawn Rs 10,949 crore from the bond markets. In the bond market, foreign investors had invested Rs 13,602 crore in March, Rs 22,419 crore in February and Rs 19,836 crore in January. Overall, in 2024, so far, foreign investors have invested Rs 87,197 crore in the bond market.
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What do experts say
Market experts believe that the Indian stock market is in a good position to attract foreign investment this year. However, there may be some fluctuations on a monthly basis due to some developments.
Nimesh Chandan, CIO, Bajaj Finserv AMC, said, “The Indian stock market and debt or bond market are in a favorable position this year. This should attract foreign flows into the country. However, there may be some volatility on a month-to-month basis.”
Himanshu Srivastava, Associate Director Manager Research, Morningstar Investment Research India, said, “India is in a strong position economically. Apart from this, the quarterly results of companies have been better than expected. This has improved the corporate world’s balance sheet.” He said, “Apart from this, the expectation of interest rate cut by the US Federal Reserve in September has increased.” He said that FPI investment will also increase due to the increase in India’s Gross Domestic Product (GDP) estimates by the International Monetary Fund (IMF) and Asian Development Bank (ADB).
