FPIs infuse Rs 2 lakh cr into Indian equities in FY24

Foreign investors have staged a remarkable comeback in the Indian equities market, by injecting more than Rs 2 lakh crore into Indian equities in 2023-24,driven by optimism surrounding the country's robust economic fundamentals amidst a challenging global environment.Moreover, the fiscal year ended on a positive note as FPIs bought shares worth over Rs 35,000 crore in March.This surge was observed across various sectors including capital goods,automobiles, financials, telecom, and real estate. Despite some late selling in the month, activity levels were notably higher than the subdued performance seen in January and February.In the first two months of 2024, FPIs were net sellers, offloading equities worth 25,744 crore rupees in January and making purchases of only 1,539 crore rupees in February.In the March series, Nifty Index gained 1.6%, settling at 22,327 while Nifty Bank was up 2.2%, settling at 47,125. Amid this upward journey, the midcap index and small-cap Index closed with losses of 0.5% and 4.4%, respectively.
The flows from foreign investors were largely driven by factors such as inflation and interest rate scenarios in developed markets such as the US and UK, currency movement, the trajectory of crude oil prices, geopolitical scenario, and the health of domestic economy among others, stated economic experts. From the view point of economic experts, Investors increasingly favoured Indian equities, drawn by the market's demonstrated resilience during uncertain periods. Compared to other similar markets, India's economy stood out as more robust and stable amidst global economic turbulence, further attracting foreign investment.
Moreover ,economies like the UK and Japan have fallen into recession, Russia and Ukraine are still at war, the USA's inflation is running hot and the debate of soft versus hard landing still persists, while China has become the global anti-hero. Therefore, India has stolen the spotlight and is delivering numbers with strong GDP growth even amidst a tough business environment.Looking forward to 2025,Bharat Dhawan, Managing Partner at Mazars in India, reportedly quoted as saying,that "The outlook is cautiously optimistic and anticipates sustained FPI inflows supported by progressive policy reforms, economic stability, and attractive investment avenues."

(Ira Singh, Asstt Editor, Gandhinagar)