Stock Market
There was a big fall in the Indian stock market on Friday. Investors lost millions of crores. The picture about the market is not clear in the future as well but in the meantime there is a good news. The unemployment rate in the US has declined, but recruitment has decreased due to the Federal Reserve’s preparations to cut interest rates this month. Market experts say that due to this development, there is a possibility of foreign portfolio investors (FPIs) increasing their investment in India. This can bring back a good boom in the Indian market.
Expectations of interest rate cuts rise
The latest US jobs data is indicating a slowdown in the US economy, which has led to expectations of a rate cut by the Fed in September, possibly by as much as 50 basis points. Experts say that if US growth concerns weigh on global equity markets in the coming days, FPIs may use this opportunity to buy in India. Concerns about a possible US recession and China’s ongoing economic challenges are key considerations for investors to re-evaluate their allocations.
Foreign investors increased investment in September
The beginning of September saw improved buying by FPIs mainly due to the resilience of the Indian market. FPIs invested Rs 9,642 crore in equities through exchanges and Rs 1,388 crore through the ‘primary market and others’ category as of September 6. According to Sunil Damania, chief investment officer, MojoPMS, FPI inflows are influenced by a complex interplay of factors beyond bond inclusion. Key drivers include geopolitical dynamics, the state of the US economy, yen borrowings and prevailing risk-off strategies. “Global market sentiment has moved particularly towards caution, as evidenced by Nvidia’s 25 per cent decline after hitting a record high in June,” he said.
Increasing investment in debt market
In August, FPIs invested Rs 7,320 crore in equities, compared to Rs 32,365 crore in July. They also invested over Rs 11,366 crore in the Indian debt market, taking the net inflows in the debt segment to over Rs 1 lakh crore so far in 2024, according to NSDL data.
Input: IANS
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