FPIs infuse `30,600 cr into equities in July

New Delhi Foreign Portfolio Investors (FPIs) flow into the Indian equity market remained unabated as they invested over Rs30,600 crore in the first fortnight of this month, driven by the country’s robust economic growth and strong corporate earnings.

If this trend continues, investment by FPIs in July will exceed the figures recorded in May and June, which were Rs 43,838 crore and Rs 47,148 crore respectively. With this, inflow in the equity market reached Rs 1.07 lakh crore so far this year, data with the depositories showed. Market analysts are of the view that the outlook for FPI inflows into Indian equities remains quite bright and broad-based. “The concern, however, is the rising valuations which are getting stretched. The valuations in China are hugely attractive now compared to valuations in India and, therefore, the ‘Sell China, Buy India’ policy of FPIs cannot continue for long, “V K Vijayakumar, Chief Investment Strategy at Geojit Financial Services, said. According to the data, FPIs have been continuously buying Indian equities since March and infused Rs 30,660 crore this month (till July 14). This figure includes investment through bulk deals and primary market, too, apart from investment through stock exchanges. Before March, overseas investors pulled out Rs 34,626 crore collectively in January and February. The incessant buying by FPIs could be attributed to a variety of factors such as the country’s robust economic growth, strong corporate earnings, and relatively competitive valuations of Indian equities compared to other markets, Sonam Srivastava, Founder of Wright Research, said. Further, the emerging capex cycle, the revival of Indian manufacturing, and a strong banking sector all seem to be playing a strong role in India’s attractive story, she added.