Continuing their buying spree in the March quarter, foreign investors pumped in $2.2 billion in the Indian equity market on hopes of better corporate earnings, promising economic data and buoyant global markets.
The net inflow by foreign portfolio investors (FPIs) was $2.6 billion during October-December quarter, as per Morningstar Investment Adviser India.
On month-on-month basis, FPIs were net buyers in January and March $2.16 billion and $1.79 billion, respectively. They had, however, sold equities worth $1.77 billion in February.
Despite net inflows, decline in markets dented the value of FPI investments in equities as it ended the January-March quarter this year at $414 billion from $442 billion registered in the the preceding 3 months.
However, FPIs' contribution to the equity market capitalisation remained unchanged from the previous quarter at 19%.Overall, FPIs started the quarter with a positive outlook on Indian markets. According to Himanshu Srivastava, senior analyst manager research, at Morningstar, markets were performing well globally and this led to a buildup of positive sentiments and an increase in investors' risk appetite. This resulted in huge net inflows from overseas investors into emerging markets like India.