New Delhi, Dec 29 (PTI) Foreign portfolio investment (FPI) in the Indian market stood at over Rs 51,000 crore during 2021 on account of excess global liquidity and other factors. Foreign investors remained net buyers in the domestic stock market for the third year in a row, and this trend is expected to continue.
Experts believe that with the global financial system still laden with liquidity, emerging markets may remain the preferred investment destination for several months to come.
During the year 2021, the economy appeared to be slowly coming back on track and due to this, FPIs became net buyers. His investment this year, however, is much less as compared to Rs 1.03 lakh crore in 2020. Significantly, in 2019, FPIs had invested Rs 1.35 lakh crore.
FPIs made net investments in the first three months – January, February, March – this year. Similarly, he remained a net investor in June, August and September. The remaining six months saw net selling by FPIs.
The depository data shows that foreign investors invested Rs 26,001 crore in equities, Rs 23,222 crore in debt or bond markets and Rs 1,848 crore in hybrid instruments.
On the relatively low FPI inflows this year, Julius Baer’s executive director Milind Muchhala said it was due to the strengthening of dollar index and profit-booking.
Morningstar India Associate Director – Manager Research Himanshu Srivastava said FPI inflows were driven by stimulus measures announced by central banks and excess liquidity in the global financial system.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said FPIs turned negative on India from October 2021 and several foreign brokerages downgraded India from ‘overweight’ to ‘neutral’.