FPIs Infuse Rs 4,800 crore in equities during first week of January

In a promising start to the new year, Foreign Portfolio Investors (FPIs) have shown renewed confidence in the Indian market by infusing a staggering Rs 4,800 crore into equities during the initial week of January. This substantial investment surge comes against the backdrop of burgeoning economic prospects and growing optimism surrounding India's financial landscape.According to the official data, foreign investors made a net investment of Rs 4,773 crore in Indian equities this month (till January 5).This came following a massive investment of Rs 66,134 crore in December and Rs 9,000 crore in November.
The latest flow came amid investors waiting on the sidelines to get further cues on interest rates from the US Fed meeting minutes released last week, according to financial experts.With expectations of a prolonged decline in US interest rates in 2024, there is an anticipation that FPIs will likely escalate their purchase, particularly in the initial months of the New Year leading up to the general elections, official reportedly stated.Further, FPI inflows into debt will also see acceleration in 2024, he added.He further said that investors want to get in as early as possible before the two most major events of the year-- Indian general elections and Fed rate cuts.Adding the political stability confidence as generated from state election results in December has created the perfect recipe for a secular bull-run accompanied by FPI inflows, he added.
Overall, the total FPI flows for 2023 stood at Rs 1.71 trillion in equities and Rs 68,663 crore in the debt markets. Together, they infused Rs 2.4 lakh crore into the capital market.The flow in Indian equities came following a worst net outflow of Rs 1.21 trillion in 2022 on aggressive rate hikes by the central banks globally. Before the outflow, FPIs invested money in the last three years, according to information.

(Ira Singh, Asstt Editor, Gandhinagar)