Mumbai: Foreign portfolio investors (FPI) have made a robust return to the Indian equity markets pumping in over Rs 7,800 crore in just eight trading sessions following the Union Budget. The government’s decision to stick to its medium term fiscal consolidation road map helped in improving investors sentiment towards the markets.
“The government’s commitment to meet its fiscal deficit target has acted as a major trigger for this sharp rise in foreign portfolio investment. The recovery in global markets along with the expectation of an interest rate cut by the RBI in its forthcoming monetary policy meeting have also helped the domestic equities to maintain its momentum,” said Rikesh Parikh, vice-president, market strategist at Motilal Oswal Financial Services.
Overseas investors had remained consistent sellers during the last four months offloading shares worth Rs 26,538.46 crore. Market pundits said the growing concerns regarding global growth slowdown amidst a steep fall in the prices of industrial commodities caused widespread risk aversion in global financial markets. This along with a lacklustre earnings growth reported by India Inc had forced global investors to rework their investment strategies during the last few months.
While overseas investors have responded positively to the Union Budget proposals, U.R. Bhat, MD, Dalton Capital Advisors pointed out that the continued weakness in the Chinese economy are still a major cause of worry for global investors.
