Foreign investors pump in ₹44,500 crores into Indian equities in three weeks of August

Sentiments in the equity market have turned bullish due to the sustained buying by FPIs

After turning net buyers last month, foreign investors have shown tremendous enthusiasm for Indian equities and have infused close to ₹44,500 crore in August so far amid softening of inflation in U.S. and falling dollar index.

This was way higher than a net investment of nearly ₹5,000 crore by Foreign Portfolio Investors (FPIs) in entire July, data with depositories showed.

FPIs had turned net buyers for the first time in July after nine straight months of massive outflows, which started in October last year. Between October 2021 till June 2022, they sold a massive ₹2.46 lakh crore in the Indian equity markets.    

In the coming months, FPI flows are to remain volatile. However, with the fading concerns of rising inflation, tightening of monetary policy and performance of first quarter earnings, inflows are likely to improve in emerging markets, said Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities.      

The near-term trend in capital flows will be influenced mainly by the movement of the dollar, V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.      

According to data with depositories, FPIs pumped in a net amount of ₹44,481 crore in Indian equities during August 1-19. This is the highest investment made by them so far in the current year.

Sentiments in the equity market have turned bullish due to the sustained buying by FPIs.