With recent inflows, FPI investment by 2024 is expected to reach Rs. 9,435 crore, data with depositories showed.
After a heavy sell-off in the previous two months, foreign investors in the first week of December amid stabilization in global conditions and expectations of a possible US Federal Reserve rate cut saw Rs. Indian equities have made a strong comeback with net investment of Rs 24,454 crore.
Foreign Portfolio Investors (FPIs) in November raised Rs. 21,612 crore and in October Rs. The revival followed significant outflows in the previous months, drawing in massive funds of Rs 94,017 crore – the worst monthly outflow on record.
Interestingly, September saw a nine-month high for FPI inflows, with Rs. Volatility in foreign investment trends was highlighted with a net inflow of Rs 57,724 crore.
With recent inflows, FPI investment by 2024 is expected to reach Rs. 9,435 crore, data with depositories showed.
Looking ahead, the flow of foreign investments into Indian equity markets will depend on several key factors. These include the policies implemented under Donald Trump’s presidency, the prevailing inflation and interest rate environment and the evolving geopolitical landscape, said Himanshu Srivastava, associate director of manager research at Morningstar Investment Research India.
Further, the third quarter earnings performance of Indian companies and the country’s progress on the economic growth front will play a crucial role in shaping investor sentiment and influencing foreign inflows, he added.
According to data with depositories, FPIs this month (till December 6) have collected Rs. 24,454 crore net investment.
Trivesh D, COO, TradeGenie, a stock trading platform, attributed the latest inflows to improving global conditions and the possibility of a US Fed rate cut.
Also, the recent correction in the market may have encouraged FPIs to build some exposure, Srivastava said.
Additionally, uncertainty over Chinese equities in the wake of US President-elect Donald Trump’s proposed tariffs on China and several other nations could prompt FPIs to look back at Indian equities, which offer clearer long-term growth prospects despite relatively high valuations. , he added.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said the change in FPI strategy is evident in share price movements, particularly in large-cap banking stocks, where FPIs are selling.
The segment still has upside potential as it is fairly valued and continues to grow at a steady pace, with more domestic institutional and retail investments expected to come in, he added.
Additionally, the IT sector is poised to perform well and increase the interest of FIIs.
On the other hand, FPIs during the period under review have raised debt within the normal limit of Rs. 142 crore was withdrawn and in debt voluntary retention route (VRR) Rs. 355 crore invested.
So far this year, FPIs have invested Rs. 1.07 lakh crore has been invested.