FPI: Foreign investors’ confidence in India’s economy and government policies remains intact. This is the reason why foreign investors are continuously increasing their investment in the Indian stock market in July. Foreign institutional investors (FPIs) have made a net investment of Rs 32,365 crore in the Indian stock markets in July. According to information received from the depository data, in the first two days of August (1-2 August), FPIs have withdrawn money by selling Indian shares worth Rs 1,027 crore.
August’s investment will be decided by US economy
FPI flows have seen some volatility since the announcement of a hike in capital gains tax on equity investments in the budget. VK Vijayakumar, chief investment strategist at Geojit Financial Services, said developments in the US economy and markets will determine the trend of FPI activity in August.
The Federal Reserve may cut interest rates
Vaibhav Porwal, co-founder of Derive, said, “After the slowdown in the economy and weak employment data, it is certain that the US Federal Reserve may cut interest rates in September. The important question is how much the cut will be. So far it is being estimated that a cut in interest rates by 0.50 percent is possible.”
How was the mood of foreign investors in the last 3 months
According to the depository data, foreign portfolio investors (FPIs) invested a net Rs 32,365 crore in shares in July. Earlier in June, FPIs had invested Rs 26,565 crore in shares amid political stability and a sharp rise in the markets. At the same time, foreign investors had withdrawn Rs 25,586 crore in May amid confusion over the election results.
Investment of foreign investors is continuously increasing in the bond market
Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment Research India, said that the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have increased the estimate of India’s GDP growth rate. At the same time, China’s growth rate estimate has been reduced. Due to which foreign investors are turning towards the Indian market. According to the data, FPIs have invested Rs 22,363 crore in the debt or bond market in July apart from shares. This has increased their investment in the bond market to Rs 94,628 crore so far this year.
With PTI inputs
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