The World Opinion

Tag: FPIs

  • RBI’s Forex Reserves Set To Cross 700 Bn Dollars Sooner Than Expected In FY25 | Economy News

    New Delhi: Despite global economic headwinds and deepening geopolitical uncertainties, the forex reserves are at record all-time high levels and are set to cross $700 billion in FY25 sooner than expected.

    According to the latest note by global investment firm Jefferies, RBI’s forex reserve is estimated to go up by a massive $53 billion to reach $700 billion in the current fiscal (FY25E). The rupee is now the most stable currency among major economies, it added.

    However, the way forex reserves are surging in FY25, the $700 billion mark does not look very far. India’s forex reserves jumped $5.2 billion to a fresh all-time high of $689.24 billion (in the week ended September 6). According to the weekly RBI data, foreign currency assets (FCAs) grew by $5.10 billion to $604.1 billion.

    The country is currently seeing strong domestic flows. FPI flows into debt markets have also picked up. FPIs bought equities in the Indian stock market worth Rs 16,800 crore last week, taking the total buying to Rs 27,856 crore (till September 13).

    As per the NSDL data, FPIs were buyers of equity in the cash market on all days last week. In 2024, the total investments by FPIs now stand at Rs 70,737 crore to date.

    According to market watchers, positive FPI flows have helped in achieving record forex levels in the country. This is set to create external sector resilience and boost the economy across sectors.

    The substantial foreign exchange reserves will provide the RBI with greater flexibility in monetary policy and currency management. India’s reserve position with the International Monetary Fund (IMF) has gone up $9 million to $4.631 billion.

    According to market experts, India’s strong forex will boost its economic growth trajectory by strengthening its position internationally, drawing in foreign investments, and promoting domestic trade and industry.

    Meanwhile, with the inflation in the second quarter of FY25 likely to remain below the RBI forecast of 4.4 per cent, amid the cooling of food prices, the central bank may consider rate cuts in the forthcoming Monetary Policy Committee (MPC) meetings.

    According to Jefferies, interest rates across the world have seen a sharp jump and a cycle reversal seems likely in the coming quarters which would create headroom for the RBI to also taper down benchmark interest rates in India.

  • FPIs Go Bullish Again On Buying Equities In Indian Market | Economy News

    New Delhi: Foreign portfolio investors (FPIs) bought equities in the Indian stock market worth Rs 16,800 crore this week, taking the total buying to Rs 27,856 crore this month (till September 13). 

    As per NSDL data, FPIs were buyers of equity in the cash market on all days of the week. Industry watchers said that it is significant to note that unlike in previous weeks when FIIs were buyers through the primary market, this week, they were buyers through the exchanges.

    There are two reasons why FPIs have changed their strategy from selling to buying. There is a consensus now that the Fed will start cutting rates from this month onwards pushing the US yields down, facilitating fund flows from the US to emerging markets.

    Also, the Indian market is extremely resilient with strong momentum and missing out on the Indian market would be a bad strategy for FPIs. In 2024, the total investments by FPIs now stand at Rs 70,737 crore to date.

    According to Manoj Purohit, Partner and leader, FS Tax, Tax and Regulatory Services, BDO India, the month of September came with a full swing from the FPI fraternity which made a substantial infusion in the Indian equity market, recording the second highest single-day purchase of 2024.

    “This shift in the investment wave is largely attributable to the Indian equity market reaching new all-time highs. The robust inflows are due to underlying factors such as global confidence in India’s economic outlook and the government’s commitment to drive a long term growth story,” Purohit mentioned.

    FPIs are encashing at the right time to tab the Indian market amidst positive market sentiments, political stability, contributing to the rally. This incursion not only mirrors the growing attractiveness of Indian equities but also emphasises the confidence foreign participants have shown in India’s financial markets historically as well during geopolitical crises and other macro factors.

    Also, due to the market regulator’s timely actions on easing business norms, rolling out consultation papers on industry issues, being agile to accept and inculcate global best practices to make India a competitive and one of the most preferred destination for imbedding funds to get better returns as compared to other developing economies, said experts.

  • FPIs Offloaded Over Rs 25,000 Cr Indian Stocks In May, Turning Net Sellers Second Month | Markets News

    New Delhi: The selling spree in Indian stock markets by foreign portfolio investors (FPIs) turned aggressive in May, standing at Rs 25,586 crore as the month ended. The consistent offloading of money from Indian stocks is partly attributable to a strong US dollar, sticky inflation particularly in the food segment, and poll outcome-related anxieties.

    However, in the past few sessions, they seemed to have slowed down on selling, expecting a strong performance in the indices. Both Nifty and Sensex also touched all-time highs lately, accumulating huge sums of money for investors.
     
    A week ago, the total FPI selling, cumulatively, was around Rs 28,000 crore, data from National Securities Depository Limited (NSDL) showed. “FPIs have been sellers in equity on most trading days in May. As per NSDL data FPIs have sold equity for Rs 25,586 crore in May,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

    “The main trigger for the FPI selling has been the outperformance of the Chinese stocks. The Hang Seng index boomed 8 per cent in the first half of May triggering selling in India and buying in Chinese stocks. Another reason was the spike in US bond yields.”

    FPI activity in June will be crucially influenced by the election results to be announced on June 4, and the market response to that. “If the election results ensure political stability the market is likely to respond positively to that. FPIs also are likely to turn buyers in such a scenario. However, in the medium term US interest rates will exert more influence on FPI flows,” Vijayakumar added.

    “The relatively high valuations and weak earnings, particularly in the financial and IT sectors where foreign portfolio investors (FPIs) have a high allocation, along with political uncertainties such as ambiguity around the outcome of the Lok Sabha elections, global risk-off sentiment, and the appeal of Chinese markets, have led to FPI selling,” said Vipul Bhowar, Director, Listed Investments, Waterfield Advisors.

    In April too, FPIs were net sellers in Indian stocks, as the ongoing geopolitical crisis in the Middle East then likely pushed investors to take money off their portfolios. FPIs, who continued to remain net buyers for the third month until mid-April, have cumulatively sold stocks worth Rs 8,671 crore by the end of the month.

    Interestingly, at a time when overseas investors have been remaining net sellers in Indian equities for the past several sessions, domestic institutional investors stayed net buyers, largely making up for the outflows by foreign investors.