FPI investment in Indian stocks remained in positive territory for fourth consecutive month
Sep 29, 2024
New Delhi [India], September 29 : Foreign portfolio investments in the Indian stock market remained positive for the fourth consecutive month.
This investment spree can be attributed to the bull run in benchmark indices and, more recently, to monetary policy rate cuts in advanced economies, including the US.
The buying momentum has increased in September, with FPIs purchasing stocks worth Rs 57,359 crore so far, with one trading session left on Monday. These purchases are almost equivalent to the total investments made in the past three months combined.
By definition, Foreign Portfolio Investment (FPI) involves investors acquiring foreign financial assets.
In June, July, and August, FPIs bought stocks worth Rs 26,565 crore, Rs 32,365 crore, and Rs 7,320 crore, respectively, according to data from the National Securities Depository Limited (NSDL).
The benchmark index Sensex has risen approximately 16 percent since the start of the current financial year, driven by strong GDP growth, controlled inflation, robust domestic liquidity, and favourable monsoon conditions. FPI activity in recent months was also influenced by the smooth formation of the new government following the election results.
In six of the nine months through September, FPIs were net buyers, NSDL data showed. These months were January, April, and May.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that FPI buying has contributed to the stability of the Rupee this year.
"The September 18th rate cut and the dovish commentary by the Fed can be seen as a major pivot in interest rates. This could facilitate sustained inflows into emerging markets like India," Vijayakumar added.
With large-cap valuations remaining attractive and FIIs returning in force, the market outlook remains positive, said Krishna Appala, Senior Research Analyst at Capitalmind Research.
In 2023, Foreign Portfolio Investors (FPIs) also focused on India, becoming net buyers in the country's stock market. They purchased stocks worth Rs 171,107 crore.
