in the coming days Foreign investors (FPIs) can make big sales from the Indian stock market. Going forward, concerns over changes in the India-Mauritius tax treaty will weigh on FPI flows, said VK Vijayakumar, chief investment strategist at Geojit Financial Services. This situation may persist until there is clarity on the details of the new treaty. He said that another big concern is the increasing tension in West Asia. Tension is increasing between Iran and Israel, the impact of which can be seen on FPI investment in the near term.
Domestic investors will handle the market
He said that domestic institutional investors (DIIs) have a lot of cash. Apart from this, retail investors and high net worth individuals i.e. HNIs are optimistic about the Indian market. In such a situation, the selling of FPI will be compensated from here. According to depository data, FPIs have invested a net Rs 13,347 crore in Indian stocks this month (till April 12). However, due to fears of changes in the India-Mauritius tax treaty, FPIs had sold Rs 8,027 crore on Friday. Due to the strong state of the Indian economy and better economic growth prospects, foreign portfolio investors (FPIs) have infused a net amount of more than Rs 13,300 crore into the Indian stock markets in the first two weeks of April.
FPI’s attraction increased
Himanshu Srivastava, associate director-manager research at Morningstar Investment Research India, said Indian markets have received huge inflows as Fitch downgraded China’s sovereign credit rating outlook from stable to negative due to growth concerns. He said that apart from this, the expectation of normal monsoon and the expectation of strong growth amid strong domestic economy has also increased the attraction of FPIs towards Indian markets. Apart from shares, FPIs have made a net investment of Rs 1,522 crore in the debt or bond market during the period under review.
Investing money in Indian bond market
FPIs have been investing money in the Indian bond market since the announcement of inclusion of Indian government bonds in the JP Morgan index. They have invested Rs 13,602 crore in the bond market in March, Rs 22,419 crore in February and Rs 19,836 crore in January. Overall, FPIs have invested a total of Rs 24,241 crore in shares so far this year. His investment in the debt or bond market has been Rs 57,380 crore.
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