India Becomes Lucrative Avenue For Investment, Check How Much Foreign Investors Infused In July

This positive outlook towards the Indian market was attributed to consistent economic growth and an earnings season which has fared ahead of expectations, analysts noted

Foreign portfolio investors maintained a bullish overview on Indian equities and infused Rs 32,365 crore in the segment in July. During the month, the investors also poured in Rs 22,363 crore in the Indian debt market, official data from the depositories revealed.

This positive outlook towards the Indian market was attributed to consistent economic growth and an earnings season which has fared ahead of expectations, analysts noted. The anticipation around continued policy reforms has also helped bring in more investors to the Indian market.

However, during the first two trading sessions of August, the foreign investors dumped Indian equities worth Rs 1,027 crore. In the year so far, the Indian debt market has seen an overall inflow of Rs 94,628 crore.

Commenting on the market flows, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted, “There has been a mixed trend with respect to FPI flows following the budget announcement on increase in capital gains tax on equity investments. Going forward, developments in the US economy and markets will set the trend for FPI in August.”

Sharing the outlook, Vaibhav Porwal, co-founder, Dezerv, stated that the US Federal Reserve is anticipated to slash rates in September. The employment data from the States fared lower than expectations and a weakening economy is set to ensure a rate cut ahead, he noted. “Currently, there is strong commentary getting built for maybe a 50 basis points rate cut in interest rates,” he added.

Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, noted, “The resurgence in FPI investment can be attributed to sustained economic growth, government's focus on infrastructure development,  better-than- expected earnings season that has improved corporate India's balance sheet.” Srivastava added that the surge in expectations for GDP forecast for India by IMF and ADB would help the economy fare better.