FPIs pump Rs 32,365 Cr into Indian equities in July: Rediff Moneynews

Foreign portfolio investors (FPIs) invested Rs 32,365 crore in Indian equities in July, led by political reforms and strong economic growth. Learn more about FPI investment trends.

New Delhi, Aug 4 (PTI) Foreign investors poured Rs 32,365 crore into Indian equities in July on expectations of continued political reforms, stable economic growth and better-than-expected financial results.

However, in the first two trading sessions of this month (August 1-2), Rs 1,027 crore was withdrawn from the stock, according to depository data.

Post the Budget announcement regarding the hike in capital gains tax on equity investments, a mixed trend was observed in FPI flows.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that in August, FPI trends will be dictated by changes in the US economy and markets.

“Weaker-than-expected employment data along with a slowdown in the economy have made it certain that the US Federal Reserve will cut interest rates in September. The bigger question here is the extent of the cut. There is strong talk of a rate cut of perhaps 50 basis points,” said Vaibhav Porwal, co-founder of Dezerv.

Foreign portfolio investors (FPIs) saw net inflows of Rs 32,365 crore in equities in July, according to custodian data. This came after inflows of Rs 26,565 crore in June, driven by political stability and a sharp rebound in markets.

Earlier in May, FPIs withdrew Rs 25,586 crore on worries over election results and over Rs 8,700 crore in April on worries over changes in the India-Mauritius tax treaty and sustained rise in US bond yields.

The renewed surge in FPI investment can be attributed to sustained economic growth, the government’s focus on infrastructure development and a better-than-expected earnings season, which helped boost India’s corporate balance sheet, said Himanshu Srivastava, associate director of research at Morningstar Investment Research India.

Additionally, upward revisions of Indian GDP forecasts by the IMF and ADB, as well as a slowdown in China, are also working in India’s favour, he added.

Apart from equities, FPIs invested Rs 22,363 crore in the debt market in July. This took the total debt to Rs 94,628 crore this year.

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