Continuing their buying spree, foreign portfolio investors (FPIs) invested Rs 24,965 crore in Indian markets in February so far as various organisations predicted high economic growth for the country and the Union Budget boosted investor sentiment.
According to depositories’ data, FPIs pumped in Rs 24,204 crore into equities and Rs 761 crore in the debt segment, taking the total net investment to Rs 24,965 crore during February 1-19.
In the preceding month, FPIs were net investors of Rs 14,649 crore.
“Various organisations, both national as well as international, have predicted a high economic growth for the upcoming year and the year after for India,” said Harsh Jain, co-founder and COO at Groww. S Ranganathan, head of research of LKP Securities added that FPIs remained positive on Indian markets as IMF predicted India to be the fastest growing economy in 2021.
“A pro-growth Budget aimed at leveraging the digital revolution is transformational and we expect FPI flows to continue next month as well aided by MSCI rebalancing,” Ranganathan added.
In addition, the earnings season also turned out to be good, said Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities.
For emerging markets, Oza said flows have been muted in emerging markets this month to date.
Only India and Taiwan have received meaningful FPI flows this month to date, he added
Regarding debt segment, Himanshu Srivastava, associate director – manager research, Morningstar India said, FPIs have stayed away from Indian debt markets for a long time now “mainly on concerns around COVID-19, calibrated support by RBI and low interest rates.”
Going ahead, the focus will be on how soon India gains economic momentum.
“However, the way markets are headed and given high valuations, there is a strong possibility of profit-booking at regular intervals, which could slow down the pace of net flows,” Srivastava said. Emerging markets like India may continue to receive foreign investments, as long as central banks globally adopt an accommodative stance in order to bring their economies back on track from the impact of coronavirus pandemic, he added.