In a significant turnaround, foreign investors injected over Rs 1,500 crore into Indian shares in February, marking a stark reversal from the substantial outflows witnessed the previous month. This surge in investment was fueled by robust corporate profits and promising economic growth.
Depository data further revealed that Foreign Portfolio Investors (FPIs) maintained a positive stance on debt markets, pouring in more than Rs 22,419 crore during the same period.
Looking ahead to March, the outlook for FPI flow appears optimistic, contingent upon the sustained positive trajectory of the economy and corporate performance. Mayank Mehraa, smallcase manager and principal partner at Craving Alpha, anticipates that this momentum could continue to attract foreign investment into Indian equities.
In February, FPIs channeled a net sum of Rs 1,539 crore into Indian equities, following a substantial net withdrawal of Rs 25,743 crore in January. The recent influx can be attributed to the strong corporate earnings and positive economic growth observed during the December quarter.
Despite concerns about stretched valuations in the preceding month, the impressive performance of companies justified their value, enticing FPIs to re-enter the market, as highlighted by Mehraa.
Himanshu Srivastava, Associate Director – Manager Research at Morningstar Investment Research India, emphasized that the improvement in the global economic environment likely prompted FPIs to seek investment opportunities in high-growth markets like India.
