FPIs continue to extend buying spree in Indian equities in July

livemint.com:

foreign portfolio investors (FPIs) made net purchases of Indian shares worth 306.60 billion rupees ($3.74 billion) in the first half of July.  As reported by Reuters, persistent FPI inflows have supported the rally in the blue-chip Nifty 50 and S&P BSE Sensex, driving the benchmarks to record highs. The Nifty 50 rose nearly 2% in the first half of July. Since March, foreign portfolio investors (FPIs) have invested in Indian shares worth 1,393.50 billion rupees, contributing to a 13% increase in the Nifty 50 index from March 1 to July 15.

Reuters further reported that analysts attribute the continuous influx of foreign investments to India's robust macroeconomic fundamentals, consistent earnings, and apprehensions regarding China's economic recovery. "Sustained earnings growth, continued stability in macroeconomic indicators including inflation and tax collections as well as global risk-appetite will be the key determinants of future FPI flows into India," said Sandeep Bagla, chief executive of the Mumbai-based financial services firm Trust Mutual Funds. During the first half of the current month, FPIs increased their holdings in the financial services sector by 70.5 billion rupees.

This comes after their substantial purchases of shares worth 192.29 billion rupees in the same sector in June. Notably, FPIs had also been net buyers in the financial services sector during April and May. The renewed interest of FPIs in the financials can be attributed to the sector's stable earnings, consistent loan growth, and improvements in asset quality.