FPI in 2023: Confidence of foreign investors increased on strong Indian economy, invested Rs 1.7 lakh crore in the year 2023

[ad_1]

FPI in 2023: Foreign Portfolio Investors (FPIs) have made a strong comeback in the Indian stock markets this year i.e. in 2023. So far this year, FPIs have invested Rs 1.7 lakh crore in Indian shares. It is believed that the attraction of FPIs towards Indian markets has increased due to the strong economic foundation of the country amid challenging global circumstances. In the year 2023, FPI has made huge investment in Indian markets. FPI inflow in the month of December was Rs 66,134 crore. Kislay Upadhyay, founder of Fidel Folio, said that FPI inflow is expected to remain strong in future also. However, their allocation to shares may be somewhat ‘selective’.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that there is a possibility of a continuous decline in interest rates in America in the year 2024. With this, FPIs can increase their purchases in the Indian market. FPI investment may remain high especially in the initial months of the year before the general elections. According to depository data, in the year 2023, FPIs have infused a net Rs 1.71 lakh crore in shares and Rs 68,663 crore in the debt or bond market. Thus, their total investment in the capital market has been Rs 2.4 lakh crore. Earlier, FPIs had withdrawn Rs 1.21 lakh crore from stock markets in 2022 amid aggressive increase in interest rates by central banks globally. During the three years before 2022, FPI had invested significantly in shares. FPIs had put in a net amount of Rs 25,752 crore in shares in 2021, Rs 1.7 lakh crore in 2020 and Rs 1.01 lakh crore in 2019.

Abhishek Jain, head of research, Arihant Capital, said India’s strong economic outlook, aggressive response to geopolitical issues and strong domestic consumption story make it an attractive investment destination. Out of Rs 1.71 lakh crore investment in shares this year, more than Rs 66,000 crore has been invested in December alone. The main reason for this is the victory of Bharatiya Janata Party (BJP) in the assembly elections of three states. This has increased stability on the political front in the country. Before huge investment in shares in December, FPI inflows had been negative in the last three months. Vijayakumar said that due to continuous decline in bond yields in America, there has been a sudden change in the strategy of FPIs. FPI’s attraction towards loan or bond market has also returned. This year the net investment of FPI in the bond market has been Rs 68,663 crore. In December alone, FPIs have injected Rs 18,302 crore into the bond market. Earlier in 2022, FPI had withdrawn Rs 15,910 crore from the bond market. In 2021, they had withdrawn Rs 10,359 crore and in 2020, they had withdrawn Rs 1.05 lakh crore.

JPMorgan Chase & Co. in September announced the inclusion of Indian government bonds in the emerging market benchmark market index from June next year. Due to this, the flow in the country’s bond market has increased this year. Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that this decision will help India get investment of 20 to 40 billion dollars in one and a half to two years. This inflow will increase access of foreign investors to Indian bonds and possibly strengthen the rupee. Ultimately this will strengthen the economy.

[ad_2]

Source link