Foreign investors buy Indian stocks worth Rs 14,000 Crore in August

Foreign investors buy Indian stocks worth Rs 14,000 Crore in August

REITs buy shares worth Rs 14,000 crore in a week amid falling dollar index

New Delhi:

After becoming net buyers last month, foreign investors maintained their positive stance on Indian equities and invested more than Rs 14,000 crore in the first week of August amid a slowing index of the dollar.

This was far higher than the nearly Rs 5,000 crore net investment by foreign portfolio investors (REITs) throughout July, according to custodian data.

REITs had turned bullish in July after nine consecutive months of strong net outflows, which began from October last year. Between October 2021 and June 2022, they sold a whopping Rs 2.46 lakh crore in Indian stock markets.

Hitesh Jain, Senior Analyst – Institutional Equities, Yes Securities, said REIT flows should remain positive in August as the worst for the rupiah appears to be over and the price of crude oil appears range bound.

“In addition, the earnings story remains strong, with strong revenue growth offsetting shrinking profit margins,” he added.

According to data from custodians, REITs injected a net amount of Rs 14,175 crore into Indian equities in the first week of August.

The REIT’s change in strategy has bolstered the recent market rally.

“The decline in the dollar index from over 109 last month to below 106 today is the main reason for REIT inflows. This trend may continue,” said VK Vijayakumar, strategist Chief Investment Officer at Geojit Financial Services.

Additionally, Fed Chairman Jerome Powell’s comments that the United States is currently not in recession helped improve global sentiment and risk appetite, Himanshu Srivastava said. , Associate Director – Manager Research, Morningstar India.

The recent correction in Indian stock markets has also provided a good buying opportunity, and REITs have taken advantage of this by hand-picking high-quality companies, he added.

REITs have become buyers in sectors such as capital goods, consumer packaged goods, construction and energy.

Additionally, REITs paid a net amount of Rs 230 crore in the debt market during the month under review.

According to Srivastava, the flows were largely determined by short-term trends.

Moreover, the China-Taiwan equation is another eye-catcher and rising tensions between the two could disrupt and heighten geopolitical risks in the region. This could have a negative impact on flows, he said.

In addition, fears of a US slide into recession persist. Any aggressive rate hikes by the US Federal Reserve or the expectation of such a hike could further exacerbate capital outflows from emerging markets such as India, he added.

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