Rs 12,170 crore increase in Indian equities

In June, after the general election results, foreign investors poured Rs 12,170 crore into Indian stocks, causing their value to skyrocket. The surge is driven primarily by expectations for sustained policy reforms and solid economic growth.

Earlier, investors had pulled out a net Rs 25,586 crore in May on electoral uncertainty and an additional Rs 8,700 crore in April on concerns over India’s change in tax treaty with Mauritius and rising US bond yields.

Sunil Damania, chief investment officer at MojoPMS, predicts that foreign portfolio investors (FPIs) may remain cautious due to the high valuations currently being witnessed in the Indian stock market. Damania highlighted three key reasons for the renewed foreign interest: continuity of government policy, the slowdown in the Chinese economy reflected in the significant decline in copper prices, and significant block transactions.

Although FPI inflows are concentrated in selected stocks, the overall sentiment is buoyed by expectations of a pro-growth budget. Early indicators indicate that FPIs are leaning towards financial services, telecom and real estate sectors, while limiting investments in FMCG, IT, metals and oil & gas. Additionally, FPI companies are investing heavily in the debt market with a significant total investment of Rs 64,244 crore, barring a minor pullout in April.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)