Foreign investors have reached in nearly Rs 8,285 crore into the Indian capital markets so far this month, after pulling out hefty funds in October, due to the decrease in crude oil prices, recovery in rupee and improvement in the liquidity situation.
The current infusion comes following a net outflow of more than Rs 38,900 crore in October, which was the steepest withdrawal in nearly two years.
Foreign Portfolio Investors (FPIs) had pulled out over Rs 21,000 crore from the capital markets (both equity and debt) in September. Before that, they had put in Rs 7,500 crore in July and August.
As per the depositories data, FPIs infused Rs 3,862 crore in the equity markets during November 1-16, and Rs 4,423 crore in the debt market, taking the total to Rs 8,285 crore ($1.14 billion).
Himanshu Srivastava, Senior Analyst Manager Research, Morningstar Investment Adviser India, showed the latest inflow to fall in crude prices, recovery in rupee against the dollar and improvement in the liquidity situation.
On the global front, increasing trade war tensions between the US and China has caused widespread uncertainty in emerging markets. This, coupled with growing interest rates globally, has turned investors the world over risk-averse, which prompted them to look for other attractive and safer alternatives, he added.
“I don’t expect any significant inflow from FPIs in the remaining part of this year. Movement of rupee versus the dollar, the direction of crude prices, domestic liquidity, upcoming state elections as well as general elections next year are some of the factors which the FPIs would be watching nearly.”
“Looking at all these factors and the ongoing scenario, there is still some time before India sees strong inflows from FPIs,” he added.
FPIs have pulled out over Rs 92,000 crore from the capital markets so far this year. This comprises more than Rs 38,000 crore from equities and nearly Rs 54,000 crore from the debt market.