Some factors that led to investment in July include surge in markets which provided FPIs
good profit booking opportunity, improvement in sentiment on the back of rising hopes of a coronavirus vaccine, said Himanshu Srivastava, associate director - manager research, Morningstar India.
Noting that the investment in July was lower than that in June, Srivastava said FPIs adopted a "cautious stance" while investing in India as COVID-19 cases continued to surge even as many states implemented fresh lockdown measure thus fanning concerns that growth in the domestic economy could be delayed further.
In the last week of July, FPI flows in emerging markets have been mixed with South Korea and India receiving positive flows whereas most of other markets witnessing outflows, said Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities.
"Firm US markets and correction in Dollar Index bodes well for FPI flows into emerging markets," Oza added.
In the times to come, "surge in coronavirus cases globally, increasing tension between US and China, and sharp rise in coronavirus cases in India with economy still limping may act as a deterrent for foreign investors," Srivastava noted.
Commenting on domestic factors, Oza said, "Forthcoming results would mainly be from the hard core manufacturing sector which may disappoint. Hence, FPI flows could remain mixed."
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