Stabilizing Foreign Investment Trends Resurface Amid Indian Market Strength
Despite recent improvements in foreign portfolio investment, India's equity market faced continued net outflows in June. However, positive inflows this week, driven by economic fundamentals and strategic block deals, indicate potential stabilization. Global and domestic factors such as geopolitical developments and sector-specific drivers could influence future trends.
- Country:
- India
Foreign investment in India's equity market showed promise this week despite a decline in net inflows compared to the previous week, according to the National Securities Depository Limited (NSDL). From June 16 to June 20, foreign investors injected Rs 1,209 crore into Indian equities, with strong buying on Wednesday and Friday aiding these inflows.
Market analysts attribute these investments to foreign participation in several block deals and heavy buying influenced by FTSE rebalancing. Siddhartha Khemka, Head Research at Motilal Oswal Financial Services, noted that robust economic growth, low inflation, and recent RBI rate cuts bolstered India's appeal to foreign investors, as concerns about the monsoon's potential impact ease.
Although foreign portfolio investment (FPI) flows for June remain negative, with net outflows recorded at Rs 4,192 crore by June 20, this marks an improvement from the previous week's Rs 5,402 crore outflows. Experts highlight the potential for stabilization due to India's strong fundamentals, with global geopolitical uncertainties and domestic macroeconomic indicators likely to influence future FPI trends.
(With inputs from agencies.)
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