FPIs Infuse Rs 13,347 Crore In Indian Equities In April So Far Driven By Robust Economy

However, the investors sold equities worth Rs 8,027 crore on Friday amidst concerns regarding changes in the tax treaty between India and Mauritius

At the same time, the investors poured in Rs 1,522 crore in the Indian debt market as of April 12

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Foreign portfolio investors (FPIs) retained their bullish outlook on Indian equities and infused the sector with over Rs 13,300 crore in the first two weeks of the month. This investment was driven by a resilient domestic economy along with favourable growth prospects. 

At the same time, the investors poured in Rs 1,522 crore in the Indian debt market as of April 12, official data with the depositories revealed. Elaborating on the outlook, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted, “Concerns over changes in India-Mauritius tax treaty will weigh on Foreign Portfolio Investor (FPI) inflows in the near-term till clarity emerges on details of the new treaty,” reported PTI. 

Vijayakumar noted that the geopolitical situation in the Middle East remained tense with the increase in conflicts between Iran and Israel. “These will keep the markets on tenterhooks in the near-term,” he added. The data revealed that the net investment by the FPIs in equities stood at Rs 13,347 crore in the month so far. However, the investors sold equities worth Rs 8,027 crore on Friday amidst concerns regarding changes in the tax treaty between India and Mauritius. 

Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, stated, “Several factors might have helped in the huge inflow including Fitch's downgrade of China's sovereign credit rating outlook from stable to negative due to growth concerns. In addition, anticipation of a normal monsoon season this year that could alleviate inflationary pressures, and a resilient domestic economy with promising growth prospects too helped in massive inflows.”

Notably, the foreign investors have been infusing the debt market in the recent months owing to the upcoming inclusion of the Indian government bonds in the JP Morgan index. The investment in the debt market stood at Rs 13,602 crore in March, Rs 22,419 crore in February, and Rs 19,836 crore in January. 

The overall inflow for the year so far in equities stood at Rs 24,241 crore, while the debt market clocked funds worth Rs 57,380 crore in the year.