After the Lok Sabha elections, the confidence of foreign investors i.e. FPIs in the Indian stock market seems to be returning once again. Amid the positive trend of domestic and global markets, FPIs bought shares worth Rs 11,730 crore in the second week of June. Earlier, during the first week of June, they had sold shares worth Rs 14,794 crore. After the recent investment, the net withdrawal of foreign investors from shares in June so far has been Rs 3,064 crore. Overall, foreign investors have withdrawn a net Rs 26,428 crore from shares so far this year. At the same time, till June 14 this month, FPIs have invested Rs 5,700 crore in the debt market i.e. bond market. Overall, they have invested Rs 59,373 crore in the bond market so far this year.
Earlier in May, foreign investors had withdrawn Rs 25,586 crore from shares before the election results. In April, FPIs had withdrawn more than Rs 8,700 crore due to concerns over changes in India’s tax treaty with Mauritius and the continued rise in bond yields in the US. In March this year, foreign investors had made a net investment of Rs 35,098 crore in shares and Rs 1,539 crore in February, while in January they had withdrawn Rs 25,743 crore.
Also read: Market direction will be decided by global trend and activities of foreign investors, market will remain closed on Monday due to this reason
What do the experts say?
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that after the volatility in the first week of June, stability has returned to the market.
Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that this time the government is dependent on the allies, but with the NDA coming to power for the third consecutive time, there is hope of continuation of policy reforms and economic growth. Apart from this, on the global front, lower than expected inflation data in the US has also increased the hope of interest rate cut this year.