Foreign bond investors (FPIs) continued their buying streak in March, turning steady buyers in Indian markets. Inflows rose in both debt and equity. Foreign investors extended the modest streak gained in February after being big sellers in January. Market experts also highlighted that FPIs have also invested in some wholesale deals across the stock exchanges this month.
FPIs bought ₹38,098 crore of Indian shares and the total inflow stands at ₹51,542 crore as on March 22, taking into account debt, hybrid, debt-VRR and equities, according to National Securities Depository Ltd (NSDL) data. The total debt flows stand at ₹13,223 crore so far this month.
FPI activity in Indian markets
FPIs outflows initially eased in February until they were net buyers by the end of the month, despite high US bond yields. The inflow in Indian stocks stood at ₹1,539 crore and the debt market investment rose to ₹22,419 crore in February in addition to the ₹19,836 crore purchased in January.
The inclusion of government bonds in JPMorgan and Bloomberg debt indexes in particular triggered foreign fund flows into debt markets. FPIs turned massive sellers in January 2024, breaking their buying streak, as investments saw a sharp rise in December 2023 after reversing their three-month selling streak in November 2023.
However, inflows intensified in December on strong global signals after the US Federal Reserve signaled the end of its tightening cycle and raised expectations of a rate cut in March 2024. This led to a crash in US bond yields and triggered foreign funds into emerging markets. like India.
For the entire calendar year 2023, FPIs bought ₹1.71 lakh crore in Indian stocks and the total inflow stands at ₹2.37 lakh crore considering debt, hybrid, debt-VRR and equities, according to NSDL data. The net investment of FPIs in Indian debt market stands at ₹68,663 crore during 2023.
Overall, only four months in 2023 – January, February, September and October – saw net FPI outflows from Indian stocks. May, June and July each recorded FPI inflows above ₹43,800 crores.
Disclaimer: The views and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 23 Mar 2024, 17:49 IST