Mumbai: Foreign institutional investors (FIIs) made aggressive purchases last week, pumping Rs 14,064 crore into the cash market, as Indian markets remained resilient amid strong economic performance, according to statistics released on Saturday.
According to NSDL data, the overall FII investment in the country was Rs 33,699 crore as of September 20, bringing the total to Rs 76,585 crore this year.
Market experts predict the FII buying pattern will continue in the coming days.
According to Manoj Purohit of BDO India, the US Federal Reserve dropped interest rates for the first time in four years by a bigger-than-expected 50 basis points, and foreign portfolio investors (FPIs) were aware of the move and reacted passively.
“The Indian markets reflected their resilience on a positive note basis the strong fundamentals and robust economy performance at the expected GDP growth,” said Purohit.
September saw the second-highest inflows in 2024, following March.
The flood of FII money increased the rupee’s value by 0.4% for the week ending September 20. According to analysts, this could stimulate additional FII buying.
Despite global uncertainty, the major drivers that make developing economies like India attractive include balanced budget deficits, the impact of rate cuts on the Indian currency, high valuations, and the RBI’s approach to keeping inflation under control in the absence of a rate cut.
Furthermore, the IPOs announced this year drew a huge number of international investors, making the Indian capital market robust and a profitable destination to relocate their positions from riskier countries, according to analysts.
All eyes are on the RBI now to see if it would follow suit and drop the repo rate in October or wait until December.
There is a solid rationale for moderately cutting rates to handle food inflation and decreasing interest from household savings, both of which have an influence on banks’ retail lending businesses.
According to Purohit, India’s monetary policy has been more conservative, notwithstanding the Fed’s actions thus far.
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–IANS
