Daijiworld Media Network - Mumbai
Mumbai, Mar 30: In a significant boost to Indian equity markets, foreign investors have pumped nearly Rs 31,000 crore in the last six trading sessions of March, as per the latest depository data.
This surge in foreign portfolio investment (FPI) is attributed to attractive stock valuations, a strengthening rupee, and robust macroeconomic indicators. The renewed interest from foreign investors has played a pivotal role in the stock market’s strong recovery.
During this period, the benchmark Nifty index has climbed approximately 6 per cent, reflecting a surge in investor confidence. The shift in FPI strategy from selling to buying is driven by multiple factors, including a 16 per cent correction in stock prices since their peak in September 2024, recent appreciation of the rupee, and positive economic indicators such as GDP growth, industrial production, and inflation trends.
The fresh capital inflow has also mitigated the overall net outflow for March, bringing it down to Rs 3,973 crore, according to depository reports.
Market analysts suggest that the trajectory of FPI investments will be influenced by the upcoming tariff decisions expected from US President Donald Trump on April 2. If the announced tariffs are moderate, the ongoing market rally may persist.
"Foreign investments have turned positive this week, reinvigorating the Indian markets despite it being the final week of the financial year—a period usually marked by heavy profit booking," said Manoj Purohit of BDO India.
He further noted that global economic concerns, including US tariff impositions, geopolitical tensions in the Middle East, rising inflation, subdued consumption, and elevated valuations, continue to be key considerations for investors.
Additionally, a recent move by the Securities and Exchange Board of India (SEBI) has further encouraged foreign investors. SEBI has raised the threshold for granular beneficial ownership disclosures from Rs 25,000 crore to Rs 50,000 crore, making the market more attractive to FPIs.
"FPIs with more than 50 per cent of their portfolio in a single corporate group will still adhere to the earlier limit. This change is expected to enhance trading volumes and liquidity," Purohit added.
This regulatory adjustment follows discussions with major banks regarding restrictions on participatory notes (P-Notes) trading volume, a move aimed at ensuring greater market stability and transparency.