FPIs Hooked To Debt Market, Stay Invested For Seventh Month In A Row

• Foreign portfolio investors pulled out $2 billion from stock markets
  
• FPIs pumped in $2.40 billion in debt
  
• Net inflow of Rs 1.16 lakh crore seen in the previous six months from February- July 2017 in the debt market
  

Foreign portfolio investors were buyers in the Indian debt market for the seventh month in a row in August, taking their total investment to $20 billion so far this year.

The significant inflow in August follows a net inflow of Rs 1.16 lakh crore in the previous six months from February- July 2017. In January, FPIs withdrew more than Rs 2,300 crore from the debt market.

According to the latest depository data, FPIs have put in a net sum of Rs 48,628.40 crore ($7.60 billion) in the equity space while they have ploughed in Rs 1,29,510.67 crore ($20.26 billion) in the debt segment, taking their total investments to Rs 1,78,139.07 crore ($27.86 billion).

Also Read: Foreign Investors Keep Pumping Money Into Indian Equities, But With Caution

Market analysts believe the fundamentals of Indian economy remain strong as the twin deficits have “largely corrected”. Inflation is expected to settle around the targeted 4 per cent, down from double digits a few years ago.

“Encouraged by this, portfolio inflows have surged by $24 billion this year, coupled with strong foreign direct investments,” DBS said in a recent research note.

While other major central banks signal a slow policy normalisation path, emerging market monetary policies have diverged as softer inflation lends a dovish tilt.

“The resultant wide real rates have been a draw for foreign investors,” it added.

Also Read: Growth Worries Spook FPIs, August Net Equity Outflow At $2 Billion

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