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After two months of negative inflows, investments by Foreign Portfolio Investors (FPIs) into India’s equity and debt market have turned positive in November. FPIs have so far infused ₹378 crore into the equity market and ₹12,400 crore into debt this month.
This comes after FPIs dumped Indian equities worth ₹24,548 crore in October and ₹14,767 crore in September. The inflows into the debt market were also in the negative in the last two months.
Overall, FPIs have maintained a positive outlook, with investments in equities inching towards ₹1 lakh crore since January 2023.
According to experts, the better-than-expected decline in inflation in mid-October and the decline in U.S. bond yields, with the 10-year benchmark bond yield correcting from 5 per cent in mid-October to 4.40 per cent now, has encouraged FPIs to up the inflows into India.
The announcement regarding the inclusion of Indian G-Sec in the JP Morgan Government Bond Index Emerging Markets may have also spurred foreign fund participation. This could lead to inflows of $25 billion to $30 billion into India after the inclusion is complete.
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