Foreign portfolio investors (FPIs) have been compelled to become buyers in India due to political stability, a dramatic market bounce, and aggressive retail buying, according to market observers on Saturday.
FPIs reversed their selling strategy from the two months prior and invested Rs 26,565 crore in equity in June.
Experts in the market claim that FPIs have realized it would be a mistake to sell in the market that is performing the best.
“FPI buying can sustain provided there is no sharp up move in US bond yields,” they added.
FPIs are purchasing real estate, telecom, and financials, according to the National Securities Depository Limited (NSDL)’s first fortnightly data from June.
FPIs were sellers in IT, metals and oil and gas and are likely to continue the buying trend in financials.
V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, says it’s a good thing that India is included in the JP Morgan Bond Index.
“As of right now, the debt inflows for 2024 total Rs 68,674 crore. Long-term, this will lower the cost of capital for corporations and lower the cost of borrowing for the government. This is good news for the economy and, by extension, the stock market,” he said.
When values are high, FPIs sell, and when they are reasonable, they purchase. According to analysts, the lofty valuations that the Indian equity market is currently commanding would keep FPI inflows restricted.
