Foreign inflows into Indian stocks rose to a record in November on the back of liquidity injected by global central banks, driving domestic benchmarks to new life-time highs.
Foreign portfolio investors have so far net invested Rs 55,552.6 crore in Indian equities in November, according to provisional data by NSDL. That's the highest since the depository started recording data, beating the previous high of Rs 47,080 crore of August this year.
Improved prospects of an earnings recovery and a weak dollar index resulted in robust overseas flows in the month so far, driving markets higher, Binod Modi, head of strategy at Reliance Securities, said in a note. “However, valuations at these level look to be quite stretched and it calls for a caution as any let-up in terms of earnings growth outlook may result in a meaningful erosion of value.”
The Nifty 50 Index on Tuesday breached 13,000 for the first time. They surge mirrors a global rally amid hopes that vaccines will aid quicker recovery of the pandemic-battered global economy, driving earnings. Nifty has risen 9.4% so far this month, while Nifty Bank index surged 21.5%.
Financials saw the highest investment by FPI, according to the most recent fortnightly data (Nov. 1-15) by NSDL, at Rs 11,519 crore. They ploughed Rs 969-1,709 crore each in consumer durables, oil and gas, construction material and metals and mining stocks.
Domestic institutional investors, however, turned net sellers in November.
This fiscal 2020-21 has seen investments from overseas investors at Rs 154,000 crore till Nov. 24, according to NSDL. That's also the highest since data collection began in 1992.
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