New Delhi: Foreign investors have pumped in a whopping $3.5 billion (over Rs 22,000 crore) into the country's capital markets in January in anticipation of better corporate earnings and attractive yields.
However, the pace of FPI flows may slow down in the short term due to the new tax introduced on equity investments, but from the long-term perspective, the scenario continues to look positive, Morningstar India Senior Analyst Manager (Research) Himanshu Srivastava said.
According to the depositories data, Foreign Portfolio Investors (FPIs) infused a net amount of Rs 13,781 crore in equities and Rs 8,473 crore in debt in January - translating into net inflows of Rs 22,254 crore ($3.5 billion).
This comes following an outflow of over Rs 3,500 crore by FPIs from the capital markets (equity and debt) in December, depositories data showed.
"High inflows in January is a usual thing because of the purchase happening for building the new fiscal books. The other reason was the anticipation of better earnings and a growth-biased 2018-19 budget," said Harsh Jain, co-founder and COO of online investment platform Groww. Dinesh Rohira, CEO of 5nance, an online platform providing financial planning services, said fund infusion can be attributed to anticipation of earnings' recovery and attractive yields.
Factors such as positive global markets; promising economic numbers back home; and better than expected third quarter earnings created a favourable investment environment for FPIs, Srivastava said.