Foreign Investors Continue to Buy Indian Stocks for the Fifth Consecutive Month
Foreign investors have maintained their interest in the Indian stock market, remaining net buyers for the fifth consecutive month, according to data from the National Securities Depository (NSDL). The data shows that foreign portfolio investors (FPIs) have purchased Indian stocks worth a total of Rs 107,067 crore so far in 2023.
This surge in foreign investments has had a positive impact on the broader market, with the stock market indices reaching new highs. For instance, the Sensex recently touched a record high of 66,311 points.
The recent influx of funds into the Indian stock market can be attributed to several factors. One significant event was the banking crisis in the US, which led to the closure of Silicon Valley Bank and other banks. This created a ripple effect, prompting investors to seek opportunities in more stable markets like India.
Additionally, the strong economic outlook for India predicted by global agencies has further fueled foreign investors’ appetite for Indian stocks. These optimistic forecasts have instilled confidence in the market, attracting foreign capital.
It is worth mentioning that in the earlier months of the year, FPIs were cautious and sold equities worth Rs 28,852 crore and Rs 5,294 crore in January and February, respectively. However, since then, they have consistently shifted towards buying Indian stocks.
In 2022, FPIs sold stocks worth Rs 121,439 crore in India. The outflow of funds was primarily influenced by factors such as tightening monetary policies in advanced economies, rising demand for dollar-denominated commodities, and the strength of the US dollar. During times of high market uncertainty, investors tend to prefer more stable markets.
Overall, the sustained net buying by foreign investors in the Indian stock market is a positive sign. It reflects their confidence in the country’s economic prospects and highlights India as an attractive investment destination. As foreign investors continue to pour funds into Indian stocks, the market is expected to remain buoyant, providing opportunities for both domestic and international investors.
