FPIs pump Rs 33700 crore in equities in September so far:Foreign investors’ confidence in the Indian stock market remains intact.So far in September, foreign investors i.e. FPIs have bought shares worth Rs 33,700 crore. According to the data of the depository, this is the second highest investment by foreign investors in Indian shares in a month so far this year. Earlier in March 2024, they had invested Rs 35,100 crore in the stock market.
The reason for this trust of foreign investors in the Indian stock market is said to be the reduction in interest rates by the US Central Bank and the strength of the Indian market. Apart from shares, during this period, foreign investors invested Rs 7,361 crore in the bond market i.e. debt market through the Voluntary Retention Route (VRR) and Rs 19,601 crore through the Fully Accessible Route (FRR).
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According to the depository data, till September 20 this month, foreign investors have invested Rs 33,691 crore in the Indian stock markets.FPIs are buying amid expectations of interest rate cuts by the US central bank Federal Reserve in September. FPIs have bought more aggressively after the Federal Reserve cut the key interest rate by 0.50 percent on September 18. This month has seen the second-highest investment of 2024 so far.With this figure, the total investment of foreign investors in shares so far this year has reached Rs 76,572 crore. Foreign investors have been continuously buying shares since June this year. Earlier, in April-May, they had withdrawn Rs 34,252 crore from shares.
Apart from equities, FPIs also invested in the debt market through the voluntary retention route (VRR) this visit. That is, Rs 7,361 crore has been put into the bond market and Rs 19,601 crore through the fully accessible route (FRR). VRR encourages long-term investment while FRR increases liquidity and access for foreign investors.
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What will be the attitude of foreign investors in future
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that the trend of FPI buying is likely to continue in the coming days.
Robin Arya of analyst company Golfi believes that the weakness in the US dollar and the stance of the Federal Reserve keep the Indian stock market attractive for FPIs.
Manoj Purohit of BDO India said that emerging markets like India remain attractive for FPIs due to balanced fiscal deficit, impact of rate cuts on Indian currency, strong valuation and RBI’s stance on controlling inflation. He said that apart from this, foreign funds are also positive towards the IPOs that came this year.
