FPIs invest Rs 10,689 cr in Aug; pace of investment slows

In August, foreign investors invested a net amount of Rs 10,689 crore in Indian equities, a decrease from the previous three months. This was due to higher crude oil prices and the return of inflationary concerns. In addition, macroeconomic unpredictability and rising U.S. bond yields may keep markets volatile in the coming week.

According to Shrikant Chouhan, Head of Research (Retail) at Kotak Securities Ltd., this has prompted foreign institutional investors to abandon emerging market equities, such as India, and park funds in safe haven US securities. In addition, macroeconomic unpredictability and rising U.S. bond yields may keep markets volatile in the coming week. According to Shrikant Chouhan, Head of Research (Retail) at Kotak Securities Ltd., this has prompted foreign institutional investors to abandon emerging market equities, such as India, and park funds in safe haven US securities.

In addition, the weak monsoon in August and its asymmetrical spatial distribution may keep inflation elevated, and this is becoming a source of concern that is impacting market sentiment. Chief Investment Strategist at Geojit Financial Services, V K Vijayakumar, stated that this may also affect FPI investments. According to data from depositories, Foreign Portfolio Investors (FPIs) have invested a net quantity of Rs 10,689 crore in Indian equities this month (as of August 26).

This figure encompasses investments made through the primary market as well as bulk transactions, which have gained momentum in recent months. Prior to this investment, FPIs had invested more than Rs 40,000 crore each in Indian equities over the previous three months. Prior to this investment, FPIs had invested more than Rs 40,000 crore each in Indian equities over the previous three months.

July's net inflow amounted to Rs 46,618 crore, compared to Rs 47,148 crore in June and Rs 43,830 crore in May. Prior to that, the inflow was 11,631 crore rupees in April and 7,930 crore rupees in March, according to data from the depositories. The lower amount of net inflow this month could be attributed to FPIs adopting a wait-and-see stance ahead of the scheduled event at Jackson Hole to gain additional insights on the upcoming monetary policy by the US Federal Reserve, according to Himanshu Srivastava, Associate Director – Manager Research at Morningstar India. The lower amount of net inflow this month could be attributed to FPIs adopting a wait-and-see stance ahead of the scheduled event at Jackson Hole to gain additional insights on the upcoming monetary policy by the US Federal Reserve, according to Himanshu Srivastava, Associate Director – Manager Research at Morningstar India. The next meeting of the Federal Open Market Committee (FOMC) is set for September 19-20.

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In addition, higher crude oil prices and a resurgence of inflation risks, as well as a rise in US bond yields, would have prompted some foreign investors to move away from hazardous markets in favor of the greater certainty and superior risk-reward profile offered by US treasuries, according to Srivastava. In addition, higher crude oil prices and a resurgence of inflation risks, as well as a rise in US bond yields, would have prompted some foreign investors to move away from hazardous markets in favor of the greater certainty and superior risk-reward profile offered by US treasuries, according to Srivastava.

In addition, the recent rally in Indian equity markets may have caused its valuation to exceed the comfort level of a few investors, he added. "The velocity of FPI investments is affected by the expectations of endowments and pension funds that sponsor them. With the US 20-year bond rate at 4.65%, FPIs' propensity to invest in riskier Indian equities could be dampened, as these funds typically aim for a return of around 6%, according to Mayank Mehraa, smallcase Manager and Principal Partner at Craving Alpha. "The velocity of FPI investments is affected by the expectations of endowments and pension funds that sponsor them. With the US 20-year bond rate at 4.65%, FPIs' propensity to invest in riskier Indian equities could be dampened, as these funds typically aim for a return of around 6%, according to Mayank Mehraa, smallcase Manager and Principal Partner at Craving Alpha.

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This reluctance stems from the availability of secure investments that offer comparable returns without the higher risks associated with equity investments. Consequently, while FPI investments continue, their moderation reflects the intricate interplay of global market dynamics, investor preferences, and potential returns, he added. During the time period under review, FPIs also invested Rs 5,950 crore in the country's debt market in addition to equity investments. During the time period under review, FPIs also invested Rs 5,950 crore in the country's debt market in addition to equity investments. To date, FPIs have invested a total of Rs 1.37 lakh crore in the equity market and Rs 26.44 lakh crore in the debt market. FPIs consistently acquire capital products across all industries.

Recently, they have also begun selling financials. FPIs consistently acquire capital products across all industries. Recently, they have also begun selling financials.