Foreign Portfolio Investors Remain Net Buyers In Indian Markets In September, Buy Rs 3,944 Crore So Far

Foreign portfolio investors have invested Rs 3,944 crore so far on a net basis in Indian capital markets in September even as they turned sellers in other emerging markets globally.

Overseas investors bought equities worth a net Rs 1,766 crore and invested Rs 2,178 crore in the debt segment on a net basis between September 1 and 18, depositories data showed.

Prior to this month, FPIs remained net buyers for three consecutive months.

They had invested Rs 46,532 crore in August, Rs 3,301 crore in July and Rs 24,053 crore in June on net basis.

“This could be attributed to the excess liquidity, which is available in the global markets, making its way into Indian equities,” said Himanshu Srivastava, associate director - manager research, Morningstar India.

Also, the rebalancing of FTSE’s Global Equity Index Asia Pacific excluding Japan and China could have also attracted flows, given the addition of few Indian stocks into the index and increased weightages in few, he added.

In the debt segment, the fall in U.S. treasury yields on account of the aggressive bond buying programme of the U.S. Federal Reserve has likely forced FPIs to look for higher yielding markets, like the Indian debt markets, said Srivastava.

Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities, said, "The investment in Indian markets during the period under review came even as FPIs remained consistent sellers in emerging markets internationally on both weekly and monthly basis. FPI flows remained positive in developed markets like US and Europe."

This has mostly been because the valuations of other emerging markets had reached unattractive levels while India's valuations were still attractive in comparison, he said.

Harsh Jain, co-founder and COO at Groww, said, "The US Fed has indicated that it plans to keep the interest rates near zero for the foreseeable future while also printing money and this makes parking money in the US and other developed markets a poor proposition and makes emerging markets --like India--seem attractive."