FPIs up stranglehold on Indian markets by $4 billion more
Overseas investors have poured in over $4 billion in the Indian capital markets this month taking total inflows to over $40 billion since January.
The net investment by foreign investors into equities was Rs 13,753 crore ($2.23 billion) last month, while they infused Rs 11,723 crore ($1.9 billion) in the debt market, taking the total to $4.1 billion, as per latest data.
The net infusion in October was $2.8 billion.
Market analysts maintain that Foreign Portfolio Investors have been betting on the Indian market mainly on account of the reforms agenda of the new government at the Centre.
They are pouring funds into Indian markets on the hopes of speedy economic growth and cut in interest rates as oil prices have dropped and inflation has declined. Moreover, foreign investors are pumping funds into debt in order to take advantage of the higher yields.
The net investment by overseas investors into the equity market has reached Rs 96,020 crore ($16 billion) so far this year, while in the debt markets it is at Rs 1.48 lakh crore ($24.4 billion), taking the total to Rs 2.44 lakh crore ($40.36 billion).
The strong inflows have helped push the Bombay Stock Exchange (BSE) index Sensex by about 36 per cent so far this year.
Since the beginning of June, Foreign Institutional Investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called Foreign Portfolio Investors (FPIs).