Investment: Brazil, China competes with India
Foreign portfolio investors (FPIs) have pumped in nearly Rs.8,285 crore into the Indian capital markets so far this month, after pulling out hefty funds in October, due to fall in crude oil prices, recovery in rupee and improvement in the liquidity situation.
According to depositories data, FPIs infused Rs.3,862 crore in the equity markets during November 1-16, and Rs.4,423 crore in the debt market, taking the total to Rs.8,285 crore (US$1.14 billion).
The recent infusion comes following a net outflow of more than Rs.38,900 crore in October, which was the steepest withdrawal in nearly two years, reported Press Trust of India.
The FPIs had withdrawn over Rs.21,000 crore from the capital markets (both equity and debt) in September, after they had put in Rs.7,500 crore in July and August.
The latest FPI inflow is attributed to fall in crude prices, recovery in rupee against the dollar and improvement in the liquidity situation.
On the global front, escalating trade war tensions between US and China has caused widespread uncertainty in emerging markets.
This, coupled with increasing interest rates globally, has turned investors the world over risk-averse, which prompted them to look for other attractive and safer alternatives, said Himanshu Srivastava, Senior Analyst Manager Research, Morningstar Investment Adviser India.
“I don’t expect any significant inflow from FPIs in the remaining part of this year. Movement of rupee versus dollar, direction of crude prices, domestic liquidity, upcoming state elections as well as general elections next year are some of the factors which the FPIs would be watching closely,” Srivastava was quoted as saying.
“Plus, there are other emerging markets like China and Brazil which are better placed in terms of valuation compared to India.
“Looking at all these factors and the ongoing scenario, there is still some time before India sees strong inflows from FPIs,” added Srivastava.
FPIs have pulled out over Rs.92,000 crore from the capital markets so far this year. This includes more than Rs.38,000 crore from equities and nearly Rs.54,000 crore from the debt market, according to media reports. fiinews.com
