Foreign investors have made a net investment of about Rs 10,555 crore in the Indian equity markets so far in the month of December amid softening of inflation in the US and stabilization of oil prices.
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Foreign investors have made a net investment of about Rs 10,555 crore in the Indian equity markets so far in the month of December amid softening of inflation in the US and stabilization of oil prices. In November, foreign portfolio investors (FPIs) had invested more than Rs 36,200 crore in Indian markets. Depository data shows that FPIs have made net inflows of Rs 10,555 crore between December 1 and 16, mainly due to weakening dollar index and positive macroeconomic trends.
What is the reason for the big investment?
Earlier in September, foreign investors made a net withdrawal of Rs 7,624 crore from Indian markets and Rs 8 crore in October. VK Vijayakumar, chief investment strategist, Geojit Financial Services, believes foreign capital inflows will depend on global developments. He said that the yield of dollar index and US bonds would depend on the level of inflation in the US.
At the same time, Shrikant Chauhan, head of equity research (retail), Kotak Securities, said that capital inflows from FPIs may remain volatile in the coming times, as volatility is increasing in markets across the world. This is because central banks around the world have expressed their intention to keep interest rates high for a long time to control inflation. Barring India, all emerging markets including the Philippines, South Korea, Taiwan, Thailand and Indonesia have seen negative FPI inflows so far in December.
Foreign exchange reserves also increased
At the same time, let us tell you that the country’s foreign exchange reserves have increased by $ 2.91 billion to reach $ 564.06 billion during the week ended December 9. The Reserve Bank of India (RBI) gave this information on Friday. Foreign exchange reserves have increased for the fifth consecutive week. Last week, the country’s total foreign exchange reserves had increased by $11 billion to reach $561.16 billion. Let us tell you that in October 2021, foreign exchange reserves had reached an all-time record level of $ 645 billion.
It later declined as the central bank used reserves to counter a sharp fall in the rupee’s exchange rate amid global developments.
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