FPIs Infuse Rs 1,156 Crore In Indian Equities In May So Far

Foreign investors adopted a waiting approach to Indian equities and invested Rs 1,156 crore in the segment in May so far. At the same time, the investors withdrew Rs 1,726 crore from the Indian debt market, official data from the depositories revealed. 

Prior to this development, the investors dumped Indian equities worth Rs 8,700 crore in April, due to worries regarding revisions in India’s tax treaty with Mauritius and a consistent increase in the US bond yields, reported PTI. In March, the investors poured in Rs 35,098 crore, and invested Rs 1,539 crore in February. 

Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, commented, “With general elections in full swing in India, foreign investors have adopted a wait and watch approach, until the election results are out. Additionally, a mixed batch of US data has barely shaken the perceptions that the economy remains robust, indicating that the Federal Reserve may push its first interest rate cut to later part of this year.”

Experts also believed that the recent jobs data from the US reflected a slowing economy, in turn, increasing the need for a rate cut. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted, “The wage increase falling below 4 per cent also reflects a weakening labour market. From the stock market's perspective this is good news. That's why the US markets rallied sharply on Friday.”

So far in 2024, the overall inflow for equities stood at Rs 3,378 crore and Rs 43,182 crore in the debt market.

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Before May, the investors infused Rs 13,602 crore in March in the debt market, and Rs 22,419 crore in February. This flow of funds was attributed to the inclusion of the Indian government bonds in the JP Morgan index, scheduled for June 2024.