Foreign investors pump Rs. 12,400cr into debt market in November
In November, Foreign Portfolio Investors (FPIs) poured a whopping Rs. 12,400 crore into India's debt market, the highest inflow in over two years. This surge is attributed to the appealing yields of Indian debt and the inclusion of Indian government securities in the JP Morgan Government Bond Index Emerging Markets, which has drawn foreign funds to India's bond markets.
Factors contributing to FPIs' bullish stance on Indian debt
Since the start of 2023, FPIs have consistently invested in Indian debt, with the exception of March when they withdrew Rs. 2,505 crore. The total FPI investment in debt this year has reached Rs. 47,900 crore. Bhuvan Rustagi, COO and co-founder of Per Annum and Lendbox, said that "Indian debt is relatively attractive compared to other emerging markets and offers a higher yield compared to developed markets."
FPIs' investment trends in equities and US inflation impact
FPIs also invested a net sum of Rs. 378 crore in the Indian stock market in November so far, following withdrawals of Rs. 24,548 crore in October and Rs. 14,767 crore in September. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, credited this shift to the "better-than-expected decline in US inflation around mid-October," which resulted in lower US bond yields and slowed down FPI selling. The total FPI investment for 2023 now stands at Rs. 96,340 crore.
