Foreign investors have pumped in close to Rs. 5,200 crore in the Indian capital markets in first week of the month on positive global cues coupled with the government’s reforms agenda.
Net investments by overseas investors in the equity market were Rs. 4,412 crore ($718 million) during November 3-7 while a net Rs. 765 crore ($125 million) was put in the debt market, taking the total to Rs. 5,177 crore ($843 million), as per the latest data.
Market analysts said that overseas investors (foreign institutional investors, sub-accounts or foreign portfolio investors) are betting on hopes that European Central Bank (ECB) may announce stimulus measures to revive growth in euro zone economies. Besides, Japan has already announced a plan to expand its additional stimulus package.
They believe that some of this excess liquidity will come to India compared to other emerging market countries.
Moreover, foreign investors are betting on India on account of the reforms agenda of the central government.
Since the beginning of the year, foreign investors have made a net investment of Rs. 2.23 lakh crore ($37 billion) into the country’s securities market.
This includes a net investment of Rs. 86,678 crore in equities and Rs. 1.37 lakh crore into debt market.
Strong inflows in the recent months have taken the cumulative net investments of FIIs into India to $208 billion, while their investments in rupee terms is Rs. 10.14 lakh crore.
This is based on the data since November 1992 when the FIIs began investing into Indian markets and includes about $160 billion investments into equities and further about $47 billion in the debt markets.
From the beginning of June, FIIs along with sub-accounts and qualified foreign investors have been clubbed together by the Securities and Exchange Board of India (Sebi) to create a new investor category called foreign portfolio investors.