FPIs invest ₹11,000 crore in equities in first week of September

Foreign Portfolio Investors (FPIs) show strong interest in Indian equities, driven by global factors and regulatory reforms, despite valuation concerns.

Foreign investors infused nearly ₹11,000 crore in domestic equities in the first week of the month owing to resilience of the Indian market and expectations of rate cut in the U.S.

Foreign Portfolio Investors (FPIs) have been consistently buying equities since June. Before that, they had pulled out funds to the tune of ₹34,252 crore in April-May.

The recent inflows are promising and could continue, supported by India's stable macroeconomic position. However, global factors like U.S. interest rate and geopolitical scenario would continue to be the driving force, Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, said.

According to the data with the depositories, FPIs put in a net investment of ₹10,978 crore into equities this month (till September 6).

FPIs have been on a buying spree in the Indian equity markets after the sentiments improved following comments from U.S. Federal Reserve Chair Jerome Powell, who suggested that a rate cut might be on the horizon.

"The substantial net inflows this week can be attributed to enhanced speculation of the commencement of interest rate cut cycle soon, coupled with improved prospects for India's economic growth," Srivastava said.

Additionally, buying in few select large-cap stocks also contributed to the inflows, signalling foreign investors' eagerness to capitalize on the opportunities presented by the Indian equity markets, he said.