Foreign portfolio investors (FPIs) have invested Rs 30,772 crore in the Indian stock markets so far this month due to the expectation of continued policy reforms by the Modi government, sustained economic growth and better quarterly results of companies. Himanshu Srivastava, Associate Director-Manager (Research), Morningstar Investment Research India, said that apart from this, the expectation of the budget being reform-oriented has strengthened the sentiment of investors. VK Vijaykumar, Chief Investment Strategist, Geojit Financial Services, said that going forward, if the recent trend of softening of dollar and bond yields continues, then FPIs will continue to buy in the Indian market.
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Eye on the budget to be presented on July 23
He said that domestic and foreign investors are keenly watching the possible changes in long-term capital gains tax in the budget to be presented on July 23. According to the depository data, FPIs have invested a net Rs 30,772 crore in shares so far this month (till July 19). Earlier, due to political stability and sharp rise in the markets, they had invested Rs 26,565 crore in shares in June. Earlier, FPIs had withdrawn Rs 25,586 crore from shares in May amid confusion over the election results.
Big withdrawals were made in April
Amid concerns over changes in India’s tax treaty with Mauritius and rising US bond yields, they had withdrawn more than Rs 8,700 crore in April. During the period under review, FPIs have invested Rs 13,573 crore in the debt or bond market apart from shares. This has brought their investment in the bond market so far this year to Rs 82,197 crore+
