Foreign portfolio investors have returned too Indian market. With the slow and gradual lifting up of lockdown, investors are seen to make growing investments. In the first 10 days of June itself, Indian economy received equity investments worth rupees 21876 crore. this data is reported by the national securities depository limited or NSDL. this amount is way more than the monthly investment that were received over a span of six months. However, during the nationwide lockdown that was imposed to contain the spread of coronavirus these investors pulled out almost rupees 1.4 lakh crores from the Indian economy.
The investors are showing and on and off attitude towards the markets, major reason being the economic instability due to the virus. On a positive note, the rise in investments in the month of June may bring a positive Outlook in the markets as well as influence the rating agencies to affirm India’s ratings in several domains. Moody, an international rating agency, has recently demeaned India’s sovereign rating from baa3 to Baa2 stating prolonged and unanticipated slow growth as the reason.
The governor of Reserve Bank of India is of the point of view that the investors are well informed and they do not depend only on the agency ratings.the investment trend shows that they believe in Indian markets and would continue to invest. In order to encourage the economic development prime Minister Narendra Modi has also announced the Atma Nirbhar package aimed to help businesses, industries and people across the country. However, the rising number of positive cases in the country should not be ignored. It may act as a deterrent to these green signals of economic recovery.