foreign investors
Foreign investors are once again investing in the Indian stock market. After heavy selling in October and November, foreign investors have now started investing money in December. In the first two weeks of December, FPIs have invested a net Rs 22,766 crore in Indian stock markets. Earlier in November, FPIs had made a huge withdrawal of Rs 21,612 crore from the Indian market and in October, Rs 94,017 crore. Foreign portfolio investors (FPIs) have returned to the Indian market amid expectations of interest rate cut by the US central bank Federal Reserve. Due to this the market has returned to recovery.
October’s evacuation figure was the worst
October’s withdrawal figures were the worst. Interesting fact is that in September, FPI inflows had reached a nine-month high of Rs 57,724 crore. This reflects instability in the investment attitudes of foreign investors. According to depository data, FPI investment in shares so far in 2024 has stood at Rs 7,747 crore with fresh inflows. Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said that going forward, the inflow of foreign investors into the Indian stock markets will depend on several key factors. These include the policies implemented by Donald Trump as President, the current inflation and interest rate situation and the geopolitical landscape.
Liquidity increased in the market due to decrease in CRR
He said that apart from this, the third quarter results of Indian companies and the country’s progress on the economic growth front will also play an important role in guiding investor sentiment. According to depository data, FPIs have invested a net Rs 22,766 crore in shares so far this month (till December 13). The reason for this is that it is believed that the US Central Bank will cut interest rates. Vipul Bhowar, senior director (listed investments), Waterfield Advisors, said the Reserve Bank of India (RBI) has increased liquidity by reducing the cash reserve ratio (CRR), which has boosted investor sentiment.
Sentiment improved due to decline in inflation
Apart from this, consumer price index (CPI) based inflation has declined from 6.21 percent in October to 5.48 percent in November. This has created hope among investors that the Reserve Bank of India (RBI) will cut the repo rate in the upcoming monetary policy review. During the period under review, FPIs have invested Rs 4,814 crore in bonds under the general limit. At the same time, he has withdrawn Rs 666 crore from the Voluntary Retention Route (VRR). So far this year, FPIs have invested Rs 1.1 lakh crore in the debt or bond market.
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