FPIs invested Rs 57,300 crore in stocks in December as a result of robust economic growth and political stability

 FPIs invested Rs 57,300 crore in stocks in December as a result of robust economic growth and political stability

FPIs invested Rs 57,300 crore in stocks in December as a result of robust economic growth and political stability

The political stability, robust economic development, and ongoing decrease in US bond rates have all contributed to foreign portfolio investors' (FPIs) inflow of over Rs 57,300 crore into the Indian equities markets this month.

This year's total FPI investment was above Rs 1.62 lakh crore

This month, foreign portfolio investors (FPIs) have made over Rs 57,300 crore in investments in Indian equities markets, mostly due to political stability, robust economic development, and a steady decrease in US bond rates.

This brings the FPI's total investment for the year to above Rs 1.62 lakh crore

According to VK Vijayakumar, chief investment strategist at Geojit Financial Services, the US interest rate market is predicted to drop in the next year, and foreign portfolio investors (FPIs) would probably start purchasing more in 2024.

The data shows that this month (till December 22), FPIs invested a net of Rs 57,313 crore in Indian shares. In a year, this was their greatest monthly flow. This follows an October net investment of Rs 9,000 crore.

Prior to this, foreign investors had taken out Rs 39,300 crore in August and September, according to depository statistics. There are a number of reasons for the significant influx of foreign portfolio investors into the Indian stock markets. The two most important of them, according to Himanshu Srivastava, associate director-manager research at Morningstar Investment Research India, are political stability and the optimistic outlook for Indian markets.

According to him, other factors that have drawn international investors to consider investment possibilities in India include the nation's robust and stable economy, outstanding corporate results, and a string of initial public offerings (IPOs).

According to Vijayakumar, the reason for the abrupt shift in FPIs' approach is the ongoing decrease in US bond rates. Mayank Mehra, smallcase manager and principle partner at Craving Alpha, said, "India's market engine is revving: stronger-than-expected GDP growth, coupled with a growing manufacturing sector, paints a vibrant picture for investors." The US Federal Reserve has signaled the end of the cycle of rate hikes globally by implying three potential rate cuts in 2019. This is encouraging for developing countries such as India.

However, US Treasury rates are falling and the value of the dollar is declining as a result of the Fed's loosening of regulations, according to Bhuvan Rustagi, COO and co-founder of Enum and Lendbox.

FPIs were also drawn to invest in India due to several country-specific reasons including robust economic development, stable political environments, increased corporate profitability, and favorable valuations.

Regarding bonds, during the period under review, the debt market attracted a total of Rs 15,545 crore. According to the report, this followed inflows of Rs 14,860 crore in November and Rs 6,381 crore in October. Regarding industry, FPIs were heavy purchasers in the financial services space and also shown interest in the capital goods, car, and telecommunications sectors