Foreign Portfolio Investors have faith in the Indian markets and are continuously investing. This can be gauged from the fact that FPIs have so far invested more than Rs 33,600 crore in the stock markets in the month of July. In the previous month i.e. June 2024, these investors had invested heavily, whereas in the month of May their indifference was seen and there was a lot of withdrawal.
This much investment came from abroad till 26 July
Good news is constantly coming from foreign investors for India and their investment in Indian markets is increasing. According to a PTI report, foreign investors or FPIs have invested more than Rs 33,688 crore in the month of July so far (26 July 2024). From the expectation of policy reforms in the country to the excellent quarterly results of the companies, the sentiments of foreign investors have been affected and this is visible in the form of an increase in the investment being made by them.
This is the impact on sentiment due to the announcement made in the budget
According to the report, the announcements made in the first budget (Union Budget 2024) of Modi 3.0 presented in Parliament on 23 July 2024, however, have had a negative impact on the sentiment of foreign investors. In fact, during her budget speech, Finance Minister Nirmala Sitharaman had made some announcements like increase in tax on futures and options trade (F&O) and capital gains from equity investment. From the next day i.e. July 24 to the last trading day of last week, July 26, in just three trading days, foreign investors have withdrawn more than Rs 7,200 crore from the Indian markets.
Investment also came in the bond market
If we look at the data of the depository, while foreign portfolio investors (FPIs) increased their investment in shares in the month of July, they also invested heavily in the debt or bond market. An investment of Rs 19,223 crore has come here till July 26. FPI investment in the bond market has reached the level of Rs 87,847 crore so far in the year 2024.
Withdrawal in May, then investment in June
Earlier, the attitude of foreign investors was bullish in the month of June and FPIs invested Rs 26,565 crore in shares in June. However, in the previous month of May, FPIs were seen to be indifferent and there was a lot of withdrawal due to the confusion over the results of the Lok Sabha elections in the country at that time and other reasons including changes in India’s tax treaty with Mauritius. If the report is to be believed, in May, foreign investors withdrew Rs 25,586 crore from the Indian stock market.