Foreign portfolio investors (FPI) continue to have good appetite for Indian equities, with inflows till July 19 having crossed $3.6 billion. The total figure for 2015 was $3.3 billion.
FPIs purchased shares worth $85.62 million on Tuesday, provisional data from the exchanges shows.
Inflows into India are the third highest within the Asian markets, after Taiwan, which has attracted $9.2 billion, and South Korea, which has pulled in $5.6 billion, data compiled from Bloomberg showed.
Foreign investors have bought Indian equities worth $826 million so far in July.
Raamdeo Agrawal, MD & co-founder of Motilal Oswal Investment Services, attributed the higher FPI inflows to India being a bright spot among its Asian peers. He said FII inflows could increase if reform measures go as planned.
“We expect to have a terrific monsoon, the current account deficit is steady and exports have also gone into a positive zone. If the GST Bill goes through smoothly, we might get some large inflows,” Agrawal said.
According to Kotak Institutional Equities, the rapid appreciation in prices of several stocks in recent weeks has further reduced the appeal of the Indian market. “It is increasingly difficult to find ideas with decent absolute upside without looking at FY2019. Low global yields have already led to mispricing in several sectors”, the brokerage wrote in a recent report in early July.
The brokerage noted that investors are sanguine despite expensive valuations for somewhat tenuous reasons, including comfort (stock prices have been high for some time) and compulsion (other asset classes offer equally low yields).
