New Delhi: Foreign portfolio investors (FPIs) were net purchasers in Indian markets in August, investing Rs 16,459 crore, with the debt category accounting for the majority of the investment. Between August 2-31, depositories data indicated, they invested barely Rs 2,082.94 crore in stocks and Rs 14,376.2 crore in debt.
So far this calendar year, the amount of money invested in the debt category has been the largest.
“The increasing disparity between US and Indian bond rates is the primary cause for FPI debt purchases. The 10-year US Treasury note is below 1.30 percent, while the 10-year Indian Treasury note is above 6.2 percent. In addition, the INR’s stability has reduced the cost of hedging. Expectations for the exchange rate are similarly positive. At present high stock values, the risk-reward ratio favours debt “Geojit Financial Services’ chief investment strategist, V K Vijayakumar, stated.
He stated that equities are a good investment “The risk of missing out on the market’s momentum may have prompted FPIs to return to equity in August. The global outlook improved as well, with the Fed giving a dovish message that the economy still has a lot of ground to cover and that rate rises are still a long way off “.
The investment came as foreign portfolio investors (FPIs) continued to be net sellers in July, with a total of Rs 7,273 crore.
FPIs have also invested Rs 7,768.32 crore in Indian markets in the first three trading days of September (both equity and debt).
Shrikant Chouhan, Kotak Securities’ executive vice president of stock technical research, said that the growing rate of domestic vaccines, as well as a reasonable GST, are all factors to consider.