Encouraged by the positive sentiment created after the budget and the Reserve Bank’s liberal stance, foreign portfolio investors (FPIs) have so far pumped in Rs 23,102 crore into the domestic market in February. According to the depository data, during February 3 to February 20, FPIs have invested Rs 10,750 crore in equity and Rs 12,352 crore in the bond category. During this period, the total investment of FPIs stood at Rs 23,102 crore.
FPIs have been net investors in the domestic market since September last year.
What do the experts say?
Himanshu Srivastava, Senior Analyst Manager (Research), Morningstar Investment Advisor India, said there are several factors, including the positive post-Budget sentiment and the recent monetary policy review by the Reserve Bank, of maintaining a liberal stance, including foreign investor softening of the domestic economy and companies. Investments are being made in the domestic market even after the slow growth rate of the quarterly results.
He said that the removal of dividend distribution tax in the budget and raising the limit of FPI in corporate bonds from nine per cent to 15 per cent has also helped to restore the confidence of foreign investors.