INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Foreign investors have pumped in over Rs 7,500 crore into the Indian capital markets so far this month on better corporate
earnings coupled with improvement in crude oil prices.
The latest inflow comes following a net infusion of over Rs 2,300 crore in the
capital markets, both equity and debt, last month
Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.
According to the latest depository data, foreign
portfolio investors (FPIs) pumped in Rs 2,409 crore into equities and Rs 5,168 crore into the debt market during August 1-17, taking the
total to Rs 7,577 crore.
The inflows can be attributed to the improvement in some of the underlying factors such as weakness in crude oil
prices and better earnings from Indian Inc, said Himanshu Srivastava, Senior Research Analyst at Morningstar.
While this helped the market
to make record highs, it would have also prompted FPIs to capitalise on its uptrend.
However, there is a bit of uncertainty and cautiousness
among FPIs at the moment, he added
"While the underlying factors are positively inclined, the focus of FPIs would be on their sustainability over the long term," Srivastava
said.
"Trump's stance on not increasing Fed Rate has changed the rate trajectory expectations and there is a halt on increasing exposure
to US debt," Harsh Jain, COO at Groww.in, said.
"Among the emerging markets, India shows significant signs of stability as IMF forecast has
raised its economic outlook on India and the yield on the benchmark bonds has gone up to 7.78 per cent in August
All these factors have attracted investors," he added.
Overall, so far this year, FPIs have pulled out over Rs 1,500 crore from equities and
more than Rs 36,000 crore from the debt markets.
