FPI inflows recorded at ₹1.65 lakh crore in 2023, will the trend continue in 2024?
FPI inflows recorded at ₹1.65 lakh crore in 2023, will the trend continue? The economic front saw India maintaining its position as the fastest-growing global economy.
image for illustrative purpose
FPIs turned into buyers in 2023, with a record-high inflow of ₹1.65 lakh crore. The positive trend was influenced by factors such as improving macros, record-high markets, declining inflation, expectations of a rate cut in 2024, and the potential return of the incumbent government in the upcoming general elections.
FPI inflows recorded at ₹1.65 lakh crore in 2023, will the trend continue? The economic front saw India maintaining its position as the fastest-growing global economy. The Reserve Bank of India implemented a repo rate increase but later paused to balance inflation and growth. Despite unexpected events like the Israel-Hamas war, the market trend remained positive.
The FPI trend throughout the year showed that FPIs were net sellers in only four months, with positive inflows in the remaining eight. The article highlights the correlation between FPI behavior and changes in US bond yields, anticipating continued FPI purchases in 2024 due to expected declines in US interest rates.
In the debt market, FPIs became net buyers of Indian debt in 2023, with inflows of ₹67,786 crore. The article concludes that experts believe FPIs are likely to remain net buyers in Indian equities, especially considering the 2024 general election outcome.
Several experts shared their perspectives on the FPI trend in 2024. Neeraj Chadawar from Axis Securities mentioned factors supporting a higher premium for the Indian equity market, including a strong earnings outlook and a better banking sector. Apurva Sheth from SAMCO Securities highlighted the decrease in US interest rates as a positive factor for FPI inflows in India. Jyoti Roy from Sanctum Wealth emphasized reasonable valuations, stable earnings growth, and a favorable election outcome as factors attracting FPIs in 2024. Trivesh D from Tradejini mentioned positive factors like the US Federal Bank's shift and stable political conditions post the 2024 general elections.
A cautiously optimistic outlook for the Indian stock market in 2024 is awaited, with FPIs expected to play a significant role, driven by various domestic and global factors.
