FPIs' investment value rises 13% to $738 bn in Dec quarter
On a year-on-year basis, the value of such investments rose 26 per cent from USD 584 billion in December 2022.
«This could be attributed to the good performance of the domestic equity markets as well as strong net inflows from FPIs,» the report noted.
However, FPIs' contribution to Indian equity market capitalisation fell marginally during the quarter under review to 16.83 per cent from 16.95 per cent in the previous quarter.
After withdrawing USD 5.38 billion in the September quarter, foreign investors were net buyers in the Indian equity markets to the tune of USD 6.07 billion in the three months ended December 2023 owing to the decline in US Treasury bond yields. Also, the listing of IPOs and the fall in crude prices brought foreign investors back.
«The political stability following the Bharatiya Janata Party's victory in three major state elections created a favorable climate for investors. Additionally, the robust performance of the Indian economy compared to other similar economies drew investor interest,» the report noted.
However, this momentum could not be maintained, and FPIs turned into net sellers in January this year and took out USD 3.10 billion from Indian equities on multiple factors including profit booking. Moreover, cautiousness has continued to prevail so far in February.
«The Indian equity markets touched all-time high levels in January, which led FPIs to book some profits. Moreover, uncertainty over the interest-rate scenario led them to stay on the sidelines and wait for further cues
