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FPIs invest more than Rs 40,000 crore in stocks in response to robust economic development

<p>Amidst a strengthening domestic macroeconomic outlook and an improvement in the global economic environment, foreign portfolio investors (FPIs) made a significant return to the Indian equities markets, purchasing shares valued at Rs 40,710 crore during the first two weeks of the month.</p>
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<p>According to statistics from the depositories, there was a little outflow of Rs 25,743 crore in January and a tiny investment of Rs 1,539 crore in February before the inflows.</p>
<p>FPIs have been adjusting their approach in reaction to shifts in US bond rates. As a result, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, US bond rates may once again turn sellers on some days coming ahead as a result of the ongoing increase in inflation.</p>
<p>Foreign Portfolio Investors (FPIs) were major purchases in March, however this number is not a real reflection of FPI activity since it includes some bulk acquisitions that were completed via the stock exchanges. Nonetheless, he said, the pattern of FPI investment growing continues.</p>
<p>“FIPs are making investments in high growth areas like India due to improvements in both the macroeconomic climate in India and the global economy. According to Himanshu Srivastava, Associate Director Manager Research at Morningstar Investment Research India, “the recent market correction also presented a buying opportunity.”</p>
<p>Managing Director and Head of Discretionary Investment Services at Waterfield Advisors Shantanu Bhargava attributed inflows to robust GDP growth, expectations of another victory for the ruling political party, and a change in the RBI’s policy, with rate cuts of 25–50 basis points in the second half of fiscal year 2024.</p>
<p>FPIs have pumped a staggering Rs 10,383 crore into the debt market this month (till March 15), in addition to stocks. This occurred against the background of Bloomberg’s announcement that, as on January 31, 2019, India’s bonds will be included in its Emerging Market (EM) Local Currency Government Index and associated indexes.</p>
<p>Furthermore, for the last several months, foreign portfolio investors (FPIs) have been flooding the debt markets with capital due to the impending addition of Indian government bonds to the JP Morgan Index.</p>
<p>In February, they invested Rs 22,419 crore; in January, they invested Rs 19,836 crore and Rs 18,302 crore.</p>
<p>In September of last year, JP Morgan Chase & Co. said that starting in June of 2024, it would include Indian government bonds into its benchmark emerging market index.</p>
<p>It is expected that India would gain from this historic inclusion, which will bring in between USD 20 and $40 billion over the next 18 to 24 months.</p>
<p>This influx is anticipated to strengthen the Rupee and increase the accessibility of Indian bonds to outside investors, both of which would support the country’s economy.</p>
<p>Over Rs 16,505 crore has been invested in stocks so far this year, while Rs 52,639 crore has been invested in debt.</p>

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