Why FPIs are loving India?

Amidst uncertainty in global financial markets, Foreign Investors are showing interest in Indian markets. After valuations have become attractive, FIIs are infusing money in the Indian market. In the first month of the current financial year, FPIs have invested Rs 8,643 crore. FPIs have remained buyer since last two weeks. So, let’s look at the factors behind it.

Experts feel that after a fall in the domestic market, now valuations have become attractive. This is enticing the foreign investors. At a time when there are concerns about the global economy, Indian economy is shining bright. At the same time earnings season some major companies like RIL, ICICI bank upped the mood. Prior to that, in March FPIs invested Rs 7,936 crore in domestic market. Investment by US investor GQG Partners in Adani was the prominent one last month. In current times, Indian markets are expected to perform well.

However markets will continue to track the global market. On the global front there are various headwinds. Be it pertaining to slowing the economy, geopolitical tensions or financial tightening. Now if central bank in US continues to remain hawkish or geopolitical uncertainty increases then FIIs can leave India to invest in safe havens like US. India’s economy is expeted to grow around 6% in FY24 as per various estimates. It is expected to be one of the fastest growing economy of the world.

Dollar index has also taken a breather. At the start of the year, it was above 104 and right now it is around 101. Oil prices have also cooled off to around $80/barrel in global markets. These are positive for the Indian economy.

At the same time Indian corporates have cleaner balance sheets and we can expect boom in Capex cycle.