FPI: In the first week of September, foreign investors bought shares worth Rs 11000 crore, invested Rs 7600 crore in the bond market

Foreign investors have invested about Rs 11,000 crore in the domestic stock markets in the first week of the month. FPI investment has increased due to strength in the Indian market and expectations of interest rate cut in the US. Foreign portfolio investors (FPIs) have been continuously buying equities since June. Earlier, they had withdrawn an amount of Rs 34,252 crore in April-May. Himanshu Srivastava, Associate Director, Morningstar Investment Research India, said that the recent investments are promising and may continue due to India’s strong macroeconomic position. However, global factors like US interest rates and geopolitical scenario will remain the driving force. According to the data, FPIs have made a net investment of Rs 10,978 crore in shares this month (till September 6). FPIs are investing in Indian equity markets after the sentiment improved after the comments of US Federal Reserve Chairman Jerome Powell. He had indicated that interest rates could be cut. Srivastava said, “The reason for the net inflows this week can be attributed to the increased chances of the interest rate cut cycle in the US starting soon. … It can also be attributed to the better prospects of India’s economic growth.” He said that apart from this, buying in the shares of some select big companies also contributed to the investment. This indicates the eagerness of foreign investors to take advantage of the opportunities offered by the Indian equity markets. Also, a series of regulatory reforms aimed at streamlining the process for FII investment has further boosted investor sentiment. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that this is positive for FPI inflows in emerging markets like India due to the fall in the yield on 10-year bonds in the US. He said that however, high valuations are a matter of concern. If concerns about US growth affect global equity markets in the coming days, then FPIs can use this opportunity to buy in India. During the period under review, FPIs invested more than Rs 7,600 crore in the bond market apart from equity.