FPIs Rally: Record Rs 9,000 Cr Infusion into Equities in November; Debt Inflow Hits 6-Year Peak


December 4, 2023

New Delhi, India

Foreign Portfolio Investors

Foreign Portfolio Investors (FPIs) have rekindled their interest in Indian financial markets, injecting substantial funds into both equities and debt during November.

Equity Market Revival: In a surprising turnaround, FPIs pumped Rs 9,000 crore into Indian equities last month, bouncing back from two months of net selling. The surge is attributed to a combination of factors, including a dip in US Treasury bond yields and the resilient nature of the domestic market.

Factors Influencing Equity Investments:

  1. Global Factors: Fluctuations in US Treasury yields and crude oil prices.
  2. Positive Market Events: Remarkable IPO listings of IREDA and Tata Tech.

Debt Market Flourishes: Simultaneously, FPIs made a significant mark in the debt market by infusing Rs 14,860 crore, marking a six-year high. The inclusion of Indian G-Sec in the JP Morgan Government Bond Index Emerging Markets has been a catalyst.

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Factors Driving Debt Inflows:

  1. Index Inclusion: Positive response to Indian G-Sec inclusion.
  2. Cumulative Trend: A robust influx of Rs 50,270 crore in 2023 so far.

Market Sentiments and Future Predictions: The future trajectory of FPIs hinges on market trends, influenced by upcoming state election results. Analysts anticipate a potential market rally if the election results favor the ruling dispensation.

Factors Shaping Future Investments:

  1. Election Results: Crucial determinant for FPI behavior.
  2. Global Indicators: Lack of clear signals on US interest rate cuts.

Sectoral Preferences: Geojit’s Chief Investment Strategist suggests FPIs may lean towards financial sectors, where valuations are deemed fair. (source: Times of India)

Overall 2023 Trend: Despite fluctuations, the cumulative trend for 2023 remains positive, with FPIs injecting Rs 1.15 lakh crore into Indian markets.

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