Foreign investors pour funds into Indian equities amid stability

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Published Dec 04, 2023 08:56AM ET

Foreign investors pour funds into Indian equities amid stability © Reuters.

MUMBAI – In a striking turnaround from their previous offloading trend, Foreign Institutional Investors (FIIs) have been actively channeling funds into Indian equities, emboldened by the political stability following the BJP’s recent state election victories. On Monday, FIIs invested Rs 2,073 crore into the stock market, while Domestic Institutional Investors (DIIs) also showed their confidence with a substantial Rs 4,797.15 crore purchase. This influx of capital contributed to record-breaking performances in key stock indices, with the NSE Nifty soaring to an all-time high of 20,686.8 points and the Bank Nifty reaching 46,431.4 points.

The positive sentiment was already brewing on November 30, when exit polls predicting a BJP win led FIIs to inject a robust Rs 8,148 crore into equities. This was a marked change from the August-October period when FIIs collectively sold over Rs 76,000 crore in stocks. However, they selectively bought shares on certain days in November, accumulating investments totaling Rs 5,795 crore for the month.

The Indian economy’s status as the fastest-growing major economy and its political stability are attracting foreign portfolio investors (FPIs), who have invested a significant Rs 9,744 crore in December alone, following November’s Rs 9,001 crore purchase. These figures contrast sharply with September and October’s sales of Rs 14,768 crore and Rs 24,548 crore respectively. From March through August earlier this year, FPIs acquired Indian stocks worth a substantial Rs 114,716 crore according to NSDL figures.

The Indian debt market has not been left behind, witnessing significant FPI inflows totaling Rs 50,270 crore for the year. Market participants attribute this trend to external factors such as declining US bond yields and oil prices making India an increasingly attractive investment destination.

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