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Tuesday, April 16, 2024

In 2023, FPIs will invest Rs. 1.7 lakh crore in Indian stocks

<p>Foreign portfolio investors (FPIs) made a stunning return in 2023, injecting Rs 1.7 lakh crore into the Indian equities markets, driven by their belief in the strong economic fundamentals of the nation in the face of difficult global conditions. FPIs have made significant investments in 2023 as a result of the notable increase in inflows of Rs 66,134 crore in December.</p>
<p><img decoding=”async” class=”alignnone wp-image-333792″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph–750×563.jpg” alt=”theindiaprint.com in 2023 fpis will invest rs 1 7 lakh crore in indian stocks 272888 your paragraph” width=”1055″ height=”791″ title=”In 2023, FPIs will invest Rs. 1.7 lakh crore in Indian stocks 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph–750×563.jpg 750w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph–1024×768.jpg 1024w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph–768×576.jpg 768w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph–150×113.jpg 150w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-in-2023-fpis-will-invest-rs-1-7-lakh-crore-in-indian-stocks-272888-your-paragraph-.jpg 1200w” sizes=”(max-width: 1055px) 100vw, 1055px” /></p>
<p>FPI flows are anticipated to remain strong in the future. The creator of Fidel Folio and smallcase manager Kislay Upadhyay said that their distribution is probably going to be selective. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, FPIs are likely to increase their purchases in 2024 as they anticipate a continuous decline in US interest rates, particularly in the early months of the year in the run-up to the general elections.</p>
<p>FPIs invested a total of Rs 68,663 crore in the debt markets and Rs 1.71 lakh crore in stocks in 2023. According to information that is available from the depositories, they together invested Rs 2.4 lakh crore in the stock market. The most recent inflow occurred after foreign investors had the biggest net outflow from Indian stocks in 2022, amounting to Rs 1.21 lakh crore, as a result of aggressive rate rises by central banks throughout the world. FPIs had made investments in the previous three years prior to the outflow.</p>
<p>In 2021, FPIs invested a net of Rs 25,752 crore in equity; in 2020, they invested Rs 1.7 lakh crore; and in 2019, they invested Rs 1.01 lakh crore. According to Abhishek Jain, Head of Research at Arihant Capital, “India’s robust economic outlook, resilience to geopolitical issues, and strong domestic consumption story make it an attractive investment destination.”</p>
<p>More than Rs 66,000 crore of the Rs 1.71 lakh crore influx this year was invested in December as a result of the increased political stability brought about by the BJP’s recent electoral victories in three major states. The three months before the massive injection in December saw a decrease in FPI inflows.</p>
<p>According to Vijayakumar of Geojit, “this sudden change in the strategy of FPIs has been caused by the steady decline in US bond yields.” This year, after a three-year hiatus, foreign investors made a reappearance in the debt markets, contributing Rs 68,663 crore in 2023. This indicates a substantial change in their pattern of capital flow. A startling investment of Rs 18,302 crore was made in December as part of this enormous surge.</p>
<p>From the debt markets, FPIs withdrew money of Rs 15,910 crore in 2022, Rs 10,359 crore in 2021, and Rs 1.05 lakh crore in 2020. The flood of capital into the nation’s bond markets this year has been affected by JP Morgan Chase & Co.’s decision in September that it would include Indian government bonds in its benchmark emerging market index starting in June of next year.</p>
<p>It is expected that India will gain from this historic inclusion, which is set for June 2024, since it will draw in around USD 20–40 billion over the next 18–24 months. Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that the influx is probably going to increase the accessibility of Indian bonds for overseas investors and maybe boost the currency, which would help the economy. Furthermore, interest has significantly grown as a result of the heightened attention on inflation, especially in the debt market, where FPIs are steadily increasing their investments, according to Jain of Arihant Capital.</p>
<p>In addition, the debt market in India is much less developed than the stock markets. According to small case manager Upadhyay, there is a ton of space for expansion here. He went on, “We expect FPI inflow to continue secularly in both equity and debt for the next few months.”</p>
<p>The financial, IT, pharmaceutical, and energy industries were the ones that international investors favored because of the nation’s prowess in these fields as well as its dedication to sustainable growth.</p>
<p>(This article was taken from a syndicated news agency feed, PTI; News18 staff did not edit it.)</p>

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