Foreign portfolio investors (FPIs) invested a total amount of Rs 21,235 crore in domestic markets amid increasing liquidity and gradual opening up of the economy.
As per the data given by depositories, Foreign portfolio investors s invested Rs 22,893 crore into equities but pulled out Rs 1,658 crore from the debt segment, marking the total net investment to Rs 21,235 crore in between the period of June 1 to June 26.
Before this, foreign investors remained net sellers for three months in series. They pulled out a net Rs 7,366 crore in the month of May, Rs 15,403 crore in April, and a record Rs 1.1 lakh crore in March.
Harsh Jain, the co-founder, and chief operating officer at Groww, said “FPIs are increasing their investments in small- and mid-cap stocks that they were already investing in for over a year now.”
India has come out as the best-performing equity market over the past three months and this is certainly beneficial to India as it is becoming an investment destination, he further added.
Himanshu Srivastava the associate director-manager research at Morningstar India said India has performed well in contact-tracing of patients, which is helping the economy to open up. At present, the costs are still compressed and equities are attractively priced, creating is a good buying opportunity. With a long-term investment plan, Indian equities could be an honest investment option for Foreign portfolio investors especially once the coronavirus crisis is resolved and therefore the present market trend reverses.
Moreover, increased liquidity in the markets all across the world will also pave its way into emerging markets, with India also benefiting, he added.
The Indian financial markets will continue to see a rotational trend concerning foreign flows. One can expect bouts of sharp net inflows and outflows by FPIs within the Indian financial markets, counting on their changing opinion and worldwide trends, he said.
Meanwhile, the challenges concerning rising coronavirus cases and recovery of the economy persist in India, he said certain technical factors ensure the continuity of foreign flows into the country from time to time.