FPIs Pour In Over Rs 38,000 Crore In Equities In March Till Now, Add Rs 13,223 Crore In Debt Market

However, the trend reversed last week and FPIs became net sellers marginally, dumping $314 million approximately. This could be indicative of a cautious approach from the investors

Foreign portfolio investors continue to remain confident about the Indian equity market and poured in more than Rs 38,000 crore in March so far, indicating a recovery in the sector after seeing months of outflow. Official data from the depositories revealed that the investors injected Rs 13,223 crore in the debt market as of March 22, showcasing their bullish attitude in the segment. 

The investors remained optimistic about the market due to favourable shifts in the global economic scenario and robust outlook on the domestic economy, reported PTI. Prior to the month, the investors infused Rs 1,539 crore in February, and dumped equities worth Rs 25,743 crore in January, data revealed. 

Notably, the overall FPI investment in equities stood at Rs 13,893 crore in 2024 so far and touched Rs 55,480 crore in debt market in the period. Elaborating on investor’s movements, Himanshu Srivastava, Associate Director at Manager Research, Morningstar Investment Research India, said, “FPIs have become significant buyers in March. The improved global economic conditions and positive Indian macroeconomic scenario have driven FPIs to invest in high growth-oriented markets like India.Additionally, the recent market correction has provided a buying opportunity.”

Experts also noted that the foreign funds inflow can lead to strong growth in GDP and the anticipation of a possible change in the RBI’s policy. This could be followed by a rate cut of 25-50 basis points in the later half of the upcoming fiscal year, they said. 

However, the trend reversed last week and FPIs became net sellers marginally, dumping $314 million approximately. This could be indicative of a cautious approach from the investors. 

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The fundamental reason for this sustained FPI flows into debt is the inclusion of Indian bonds in the JP Morgan EM Bond Fund and Bloomberg Bond Index, which is expected to bring investment of around $25 billion. This investment will begin only by June 2024, and therefore, FPIs are doing some front running in view of this potential investment.”