After witnessing significant outflows in October and September, Foreign Portfolio Investors (FPIs) have shifted gears in November, demonstrating a positive trend in their investments in India’s equity and debt markets. FPIs have injected ₹378 crore into the equity market and ₹12,400 crore into debt during this month.
This turnaround follows a substantial sell-off by FPIs, who divested Indian equities amounting to ₹24,548 crore in October and ₹14,767 crore in September. The debt market also experienced negative inflows during the previous two months.
Despite the challenging period, FPIs have shown resilience, maintaining a positive outlook overall. Their investments in equities have approached ₹1 lakh crore since January 2023.
Experts attribute this positive shift to factors such as the better-than-expected decline in inflation in mid-October and the decrease in U.S. bond yields. The correction in the 10-year benchmark bond yield from 5% in mid-October to the current 4.40% has encouraged FPIs to increase their inflows into the Indian market.
Additionally, the announcement of the inclusion of Indian Government Securities (G-Sec) in the JP Morgan Government Bond Index Emerging Markets has likely played a role in boosting foreign fund participation. This development could potentially lead to substantial inflows of $25 billion to $30 billion into India upon completion of the inclusion process.
Kaitlin Welch manages to cover anything. She is our freelance contributor. Kristie is responsible for covering reporting in finance and business News categories. Kaitlin has experience of 5 years as a reporter to News insights. Kaitlin writes related to the News Category.
