After turning net buyers last month, foreign investors have shown tremendous enthusiasm for Indian equities and have infused close to ₹44,500 crore in August so far amid softening of inflation in US and falling dollar index. This was way higher than a net investment of nearly ₹5,000 crore by foreign portfolio investors (FPIs) in the entire month of July, data with depositories showed.
FPIs had turned net buyers for the first time in July after nine straight months of massive outflows, which started in October last year. Between October 2021 till June 2022, they sold a massive ₹2.46 lakh crore in the Indian equity markets.
In the coming months, FPI flows are to remain volatile. However, with the fading concerns of rising inflation, tightening of monetary policy and performance of first quarter earnings, inflows are likely to improve in emerging markets, said Shrikant Chouhan, head-equity research (retail) at Kotak Securities.
The near-term trend in capital flows will be influenced mainly by the movement of the dollar, VK Vijayakumar, chief investment strategist at
, said.