- The inflow comes following a net withdrawal of Rs 2,954 crore in May and Rs 9,659 crore in April, data with depositories showed.
Going ahead, improvement within the scenario on the coronavirus front within the country and pick-up within the vaccination drive may attract higher FPIs investments, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said. consistent with the info, foreign portfolio investors (FPIs) put during a net sum of Rs 7,968 crore within the Indian equity market during June 1-4.
Prior to April’s outflow, FPIs had been infusing money in equities since October. They invested over Rs 1.97 lakh crore in equities from October 2020 to March 2021. This included a net investment of Rs 55,741 crore within the first three months of this year.
“With Covid numbers rapidly falling, more foreign investors are feeling comfortable investing within the Indian economy,” Harsh Jain, Co-founder and COO, Groww, said. Though big parts of the country remain locked down, some areas with low cases are starting to ease restrictions following which certain parts of the economy are beginning to function again, he added.
Making an identical statement, Morningstar India’s Srivastava said that “signs of improvement within the coronavirus situation with daily Covid-19 cases falling consistently in India over a previous couple of weeks have provided comfort to foreign investors. The daily case count has come down below 1.5 lakh mark, alongside improving recovery rate.”
“This including good quarterly results and a positive earnings growth outlook over the long-term prompted FPIs to show their attention again on Indian equities. additionally to the present, better than forecasted GDP number for the Covid-hit 2020-21 also boosted investor sentiments,” he added.
Divam Sharma, the co-founder of Green Portfolio, said that fourth-quarter results from most of the listed players still surprise foreign investors on the positive side. additionally, there’s high optimism with global large economies opening up, exports rising, and vaccination being pushed across the world, he added.
Apart from equities, FPIs have poured just Rs 22 crore within the debt markets during the amount under review. “Debt continues to be a laggard in terms of inflows because the visibility of rate of interest rising remains low within the near future and there’s a rising inflationary pressure from high liquidity leading to money chasing risky assets to take care of the purchasing power of cash,” Green Portfolio’s Sharma said.
FPIs haven’t turned aggressively bullish over the macro-indicators of the Indian economy which is why they need to put in a low amounts in debt, Kaushlendra Singh Sengar, Founder and CEO at INVEST19, said. thus far this year, overseas investors have put during a net sum of Rs 51,094 crore inequities, however, they pulled out a net amount of Rs 17,300 crore from debt securities.
According to Morningstar India’s Srivastava, the focus for FPIs would still get on the pace of the coronavirus vaccination drive in India and the way soon India gains back economic momentum. “Though the near-term impact of the pandemic on earnings persists, if the govt builds up the vaccination drive and economy activity gains pace, the Indian markets may again receive foreign investments on a uniform basis,” he added.