Overseas investors turned net buyers of Indian equities in the month of June after remaining net sellers for two months in a row. The Foreign Portfolio Investors (FPIs) also infused a net of Rs 12,714 crore into Indian markets. Prior to this, foreign investors took out Rs 2,666 crore in May and Rs 9,435 crore in April. FPIs pumped in Rs 15,282 crore in equities between June 1 and June 25, according to depositories data.
Meanwhile, they withdrew Rs 2,568 crore from the debt segment at the same time. The overall net inflow stood at Rs 12,714 crore during the period under review. Bajaj Capital Joint Chairman and MD Sanjiv Bajaj said the inflow in June is on account of "favourable global cues and improving outlook for the Indian economy amidst a sharp fall in the number of COVID-19 cases easing of lockdown restrictions in some parts and a pick-up in vaccination."
India can witness ''V''-shaped growth revival amid forecast of a normal monsoon, supportive monetary policy, a deleverage balance sheet of the corporate sector, and a well-capitalised banking system, he added. Geojit Financial Services Chief Investment Strategist V K Vijayakumar said, "High delivery volumes in IT (information technology) and metal stocks indicate strong institutional buying."
Kotak Securities Executive Vice-President (Equity Technical Research) Shrikant Chouhan said that overall, the MSCI Emerging Markets Index gained nearly 1.49 per cent this week. Except for India and Indonesia, all key emerging and Asian markets have seen FPI outflows this month to date, he further noted.
Indonesia saw month-to-date FPI inflows of $363 million. On the flip side, Taiwan, South Korea, Thailand, and the Philippines saw month-to-date FPI outflows of $2,426 million, $1,218 million, $124 million, and $64 million, respectively, he said.
Morningstar India Associate Director (Manager Research) Himanshu Srivastava said, "From the long-term perspective, India would attract foreign investments as the macroeconomic environment improves and domestic economy starts treading on the recovery path."
So far, the ultra-loose monetary policy stance by central banks globally to support the economy in the aftermath of the coronavirus pandemic had opened flood gates of foreign money into emerging markets like India, he added. However, the US Federal Reserve's hawkish statement dented sentiments and prompted foreign investors to turn cautious, he said.