New Delhi: Foreign Portfolio Investors (FPIs) continued their bullish stance on the nation’s debt markets with a internet infusion of over Rs 15,000 crore to date this month, on the again of inclusion of Indian authorities bonds within the JP Morgan Index together with comparatively steady financial system.
This adopted a internet funding of Rs 19,836 crore in January, making it the very best month-to-month influx in additional than six years. This was the very best influx since June 2017, once they infused Rs 25,685 crore. (Also Read: Latest HDFC Bank FD Rates 2024: How Much Return Will You Get From Fixed Deposit? Check Here)
On the opposite hand, international traders pulled out greater than Rs 3,000 crore from equities throughout the interval underneath overview. Before this, they withdrew a large Rs 25,743 crore in January, knowledge with the depositories confirmed.
“The main trigger for this divergent trend in equity and debt is the high valuation in the Indian equity market and the rising bond yields in the US,” V Okay Vijayakumar, Chief Investment Strategist, Geojit Financial Services, mentioned.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment Research India, attributed the outflow from equities to the uncertainty surrounding the rate of interest surroundings, each domestically in addition to globally.
According to the information, FPIs made a internet funding of Rs 15,093 crore within the debt markets on this month (until February 9). With this, the whole funding by FPIs reached over Rs 34,930 crore in 2024. They have been injecting cash within the debt markets for the previous few months.
FPIs infused Rs 18,302 crore within the debt market in December, Rs 14,860 crore in November, and Rs 6,381 crore in October. “The Indian debt markets witnessed a reversal in FPI flow trend last year after the announcement of inclusion of Indian government bonds in the JP Morgan Index. This was one of the major drivers for the robust flows from FPIs, along with relatively stable economy,” Srivastava mentioned.
JP Morgan Chase & Co. In September final 12 months introduced that it’ll add Indian authorities bonds to its benchmark rising market index from June 2024. This landmark inclusion is anticipated to learn India by attracting round USD 20-40 billion within the subsequent 18 to 24 months.
This influx is predicted to make Indian bonds extra accessible to international traders and probably strengthen the rupee, thereby bolstering the financial system, he added. Overall, the whole FPI flows in 2023 stood at Rs 1.71 lakh crore in equities and Rs 68,663 crore within the debt markets.
Together, they infused Rs 2.4 lakh crore into the capital market. The circulate in Indian equities got here following a worst internet outflow of Rs 1.21 lakh crore in 2022 on aggressive fee hikes by the central banks globally. Before the outflow, FPIs invested cash within the final three years.
Source: zeenews.india.com
