Foreign portfolio investors (FPIs) infused ₹30,919 crore in Indian equities in August, extending their buying streak to a second straight month, amid improvingc, resilient economic activity, stable rupee and easing geopolitical concerns.
They invested ₹627 crore through the Fully Accessible Route (FAR) and ₹289 crore through the Voluntary Retention Route (VRR). However, they pulled out ₹2,318 crore through the general route.
“The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and, more importantly, the improving earnings growth in India,” V.K. Vijayakumar, chief investment strategist, Geojit Investments, said. Resilient economic activity and strengthening credit growth also reinforced confidence in India’s medium- to long-term growth prospects,” Himanshu Srivastava, Principal, manager research, Morningstar Investment Research India, said. The trend may be turning, with post-AI and war-related worries receding,” Manish Bhandari, CEO and portfolio manager, Vallum Capital, said.
Easing geopolitical concerns aided risk sentiment, while expectations of softer U.S. interest rates and a rotation of global capital away from the crowded AI and semiconductor trade in markets such as Korea and Taiwan created room for incremental allocations towards India, he added. “Cash flows suggest returning conviction; futures suggest lingering caution. Foreign investor interest also extended to the debt market.
“Corporate earnings showed signs of improvement during the June quarter, helping ease concerns around the earnings slowdown that had weighed on foreign investor sentiment earlier.
