Why FIIs are pumping money in Indian stock market — explained with 5 reasons

livemint.com:

stock market has been climbing to new highs since Friday last week. Nifty 50 index has been hitting new life-time highs for the last four sessions whereas BSE Sensex and Bank Nifty index has been touching record highs for the last three sessions.

Small-cap and mid-cap indices are also climbing to new highs on a regular basis. But, for surprise to stock market observers, foreign institutional investors (FIIs) have been buying heavily in the month of December.

By 6th December 2023, FIIs have bought Indian shares worth over ₹8,800 crore in cash segment. According to stock market experts, FIIs have changed their trade pattern in December because US treasury yield has come down from 5 per cent to near 4 per cent.

US Fed has already dropped hint to start rate cut by March 2024, which means high interest rate regime has peaked out and hence US dollar has started sliding against major global currencies. Market experts went on to add that attractive valuations of the Indian equity market and robust performance of the Indian economy is also doing the trick.

They said that political stability after BJP's win in three big states in Hindi hearland is also attracting FIIs towards Indian equity market. Also Read: Day trading guide for stock market today: Six stocks to buy or sell on Thursday Speaking on the reason for FIIs' trend reversal in their trade pattern, stock market experts listed out the following five reasons that has fueled FIIs' inflows in Indian equities: Pointing towards assembly elections results in five states, Omkar Kamtekar, Research Analyst at Bonanza Portfolio said, "The optimism among the FII community is underpinned by a series of recent events that have instilled confidence and comfort while investing in India.