Rs 23,152 Crore In Just 8 Days! Why Foreign Investors Are Pumping Money Into Indian Stocks This Month

Since the beginning of this month, India’s Nifty is already up more than 1.5% and Sensex is up 1.75%. And it seems that foreign investors, too, are believing in a further rally in Indian stocks.

Foreign Investors Pump In Rs 23,152 Crore In 8 Days

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Foreign portfolio investors’ (FPIs) net investments in Indian equities have touched a six-month high in May 2023 so far, with analysts saying the momentum is expected to continue on the back of increased favour for Indian securities.

After net selling Indian equities for the first two months of 2023, FPIs net invested Rs 23,152 crore in equities as of May 12, in just eight trading days this month, taking total net investments for the month to ?22,902 crore — also a six-month high, as per NSDL (National Securities Depository Limited)?data.?FPIs were net buyers of equities on all days of the month.

Why Foreign Investors Are Pumping In Money

Fewer future rate hikes by the US Federal Reserve, stability in the US financial services sector and expectations of high RoE and earnings growth visibility of Indian companies are driving the current inflows, market participants said, adding that Indonesia, Thailand and China are also seeing attracting flows amid concerns of a global slowdown, as per HinduBusinessLine report.

In India, domestic economy-oriented sectors such as capital goods, power, sugar, financials, industrials, real estate, building materials, automobile and chemicals are likely to see the most FPI flows.?Prior to this month, net FPI investments were the highest in November 2022, wherein they had put ?36,239 crore in equities, taking total investments for the month to ?33,847 crore.?FPIs had been selling Indian equities due to higher valuations compared to other markets, however, now there is again a shift in favour of India as an emerging market destination due to its strong macro-economic conditions, analysts said.

FPI Investments This Year

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As per NSDL data, here is how much foreign investors have invested in Indian equities, debt and hybrid this year (till Friday, May 12, 2023). The data is compiled on the basis of reports?submitted to SEBI/Depositories by Custodians and constitutes trades conducted by FPIs on and up to the previous trading day.

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(In ? Crores)

? ? ? ? ? ? ? ? ? ? ? ?Equity? Debt? Debt VRR Hybrid Total

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