New Delhi: National Securities Depository (NSDL) data shows that foreign portfolio investors have invested Rs 51,204 crore in the Indian equity segment in the month of August, their highest in 20 months. Meanwhile, FPIs have become net buyers in the Indian equity markets for two consecutive months since August and helped domestic indices stay bullish.
NSDL data shows that in July, they were net buyers with total equity purchases of Rs 4,989 crore. September 2021 was the last time foreign investors were net buyers. This month – till September, they have already invested Rs 1,963 crore, data from the depositories showed.
Global inflation, coupled with the recent withdrawal of foreign investments, has helped Indian equity markets gain momentum over the past month. The recent rise in the stock index helped investors make up for the entire loss suffered in 2022.
India’s core retail inflation fell from 7.01 per cent in June to 6.71 per cent in July, the lowest level in five months. Meanwhile, retail inflation in the US also moderated, improving buying sentiment among investors.
As for FPI investments in India, till early July, they were selling equities in Indian markets for nine to ten consecutive months due to various macroeconomic reasons.
The tightening of monetary policy in advanced economies, including increased demand for dollar-denominated goods and a strengthening of the US dollar, had triggered a steady outflow of money from the Indian markets. Investors generally prefer stable markets in times of high market uncertainty.
Besides, the depreciating rupee coupled with depleting Indian forex reserves also weighed on the weak market sentiments. For the record, FPIs have pulled out a total of Rs 159,202 crore in equity so far in 2022, data from NSDL showed.