Growth prospects attract FIIs to India
With the pause in interest rate hike in the country, the expectation of growth has increased. Due to which foreign investors are finding Indian markets attractive.
In May, foreign investors (FII) invested heavily in the stock market. During this period, investors bought shares worth Rs 43,838 crore, which is the biggest purchase in nine months. The buying trend continues for the last 3 months. But the purchase figure of foreign investors in May is at the highest level after August 2022. In August last year, foreign investors bought shares worth Rs 51,204 crore in the Indian market.
With the pause in interest rate hike in the country, the expectation of growth has increased. Due to which foreign investors are finding Indian markets attractive. And they are continuing to increase their investment. Along with this, inflation has also come down in the country. Due to which the expectation of return on investment has increased. Retail inflation has come down to an 18-month low of 4.7 percent in April. While wholesale inflation has reached even below zero. Apart from all this, the weakness of rupee against dollar is also encouraging foreign investors to invest in India.
Market expert Avinash Gorakshkar believes FIIs buying will continue due to strong dollar and weak rupee. Also Chinese stock markets are underperforming compared to Indian markets. This is another reason due to which foreign investors can increase investment in India.
In recent times, the quarterly results of most of the companies listed in the stock market have also encouraged foreign investors to invest in India. The margins of the companies have definitely broken but the growth of income and profits has motivated investors to buy. Quarterly results have shown that foreign investors have bought more shares of financial services and especially the banking sector. Along with this, investment has also increased in auto, capital goods, healthcare, oil-gas and telecom sectors. Experts believe that the market can touch a new record high.
VK Vijay Kumar of Geojit Financial believes that foreign investors’ strategy of “Sell India, Buy China” of January-February has now reversed. FIIs are now investing in markets like India, South Korea and Taiwan where corporate growth is looking better.
Overall, Indian markets have become a source of making money for foreign investors and keeping the same in mind, they are also increasing their investment. This buying by foreign investors is also supporting the stock market. But Money 9 advises that seeing this trend of foreign investors, before investing, first take the opinion of your financial advisor.