New Delhi: In the first four trading sessions of June as risk-on sentiment improved since the rapid fall of Covid-cases foreign investors have infused close to Rs 8,000 crore into Indian equities to robust corporate earnings.
The inflow comes following A net withdrawal of Rs 2,954 crore in May and Rs 9,659 crore in April data inflow followed by the depositories showed.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar India says, improvement in the scenario on the coronavirus front in the country and pick-up in the vaccination drive may have a higher rise in FPIs investments.
According to the data, a net sum of Rs 7,968 crore in the Indian equity market during June 1-4 was forwarded by foreign portfolio investors (FPIs).
From October 2020 to March 2021, they have invested over Rs 1.97 lakh crore in equities which included a net investment of Rs 55,741 crore in the first three months of this year.
“With Covid numbers rapidly falling, more foreign investors are feeling comfortable investing in the Indian economy,” Harsh Jain, Co-founder and COO, Groww, said.
Amid this second wave of the pandemic, the lockdown has made the economy drop yet with this unlocking system several small companies among the bigger ones have started with new plans to increase the growth in the economy.
Morningstar India’s Srivastava said in a similar statement that “signs of improvement in the coronavirus situation with daily Covid-19 cases falling consistently in India over the last few weeks have provided comfort to foreign investors. The daily case count has come down below 1.5 lakh mark, along with improving recovery rate.”
“This coupled with good quarterly results and a positive earnings growth outlook over the long-term prompted FPIs to turn their attention again on Indian equities. Covid-hit 2020-21 also boosted the investor sentiments,” he added.
Fourth-quarter results from most of the listed players continue to surprise foreign investors on the positive side. Further, there is high optimism with global large economies opening up, rising exports, added Divam Sharma, co-founder of Green Portfolio.
Apart from equities, FPIs have poured just Rs 22 crore into the debt markets during the review period.
“Debt continues to fall in terms of inflows as the visibility of rate of interest rising is still low shortly and there is a rising inflationary pressure from high liquidity resulting in money chasing risky assets to maintain the purchasing power of money,” Green Portfolio’s Sharma said.
According to Morningstar India’s Srivastava, FPIs would continue to be on the pace of coronavirus vaccination drive in India and how the economic state will accelerate and, when then Indian markets may again receive foreign investments consistently.
FPIs have not turned aggressively bullish over the macro-indicators of the Indian economy which is why they have put in low amounts in debt, Kaushlendra Singh Sengar, Founder and CEO at INVEST19, said.
A net sum of Rs 51,094 crore was put in the equities, however, they pulled out the net amount of Rs 17,300 crore from debt securities, till now.