FPIs inject Rs 11366 crore into debt market in August:Foreign investors have lost confidence in the Indian stock market since the 2024 budget speech. Foreign investors have been withdrawing money from the Indian stock market since July 23, 2024. Till August 24 this month, they sold shares worth more than Rs 16,305 crore. On the other hand, they invested Rs 11,366 crore in the bond market during this period. With this, the total investment of foreign investors in the bond market crossed the Rs 1 lakh crore mark this year.
Total FPI investment in bond market this year reached Rs 1.02 lakh crore
According to depository data, foreign investors invested Rs 11,366 crore in the bond market this month till August 24. The Indian bond market saw net investments of Rs 22,363 crore in July, Rs 14,955 crore in June and Rs 8,760 crore in May. Earlier, they had withdrawn Rs 10,949 crore in April. With this fresh capital inflow, the total investment of FPIs in the bond market so far in 2024 has reached Rs 1.02 lakh crore. Market analysts said that since the announcement of India’s inclusion in October 2023, FPIs have been stepping up their investments in anticipation of its inclusion in the global bond index and capital inflows have remained strong even after its inclusion.
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sold so far in august Indian shares worth Rs 16,305 crore
On the other hand, due to the Yen carry trade i.e. borrowing money from a country with low interest rate and investing in the assets of another country, fear of recession in America and ongoing conflicts at the global level, FPIs have withdrawn more than Rs 16,305 crore from equity so far this month.
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What do the experts say?
Himanshu Srivastava, Associate Director, Research Manager, Morningstar Investment Research India, said that the announcement of changes in capital gains tax on equity investments in the budget has increased this sell-off to a great extent. He said that apart from this, FPIs are cautious due to the high valuation of Indian stocks. Along with this, the growing fear of recession due to weak employment data in the US, uncertainty about the timing of interest rate cuts by the US Central Bank Federal Reserve and the end of Yen carry trade are also making FPIs take a cautious stance. Overall, India is attracting long-term investments through FPIs and the situation remains favorable in this regard.
Manoj Purohit, partner, BDO India, said that despite the global slowdown and the ever-increasing geo-political tensions in West Asia and neighbouring countries, India still remains an attractive investment destination. Due to this, foreign investors are coming forward for long-term investments.
