"Off late we have witnessed lesser impact of FPI activity on Indian markets largely due to strong participation by domestic investors. I would prefer this trend to continue as it would make the markets more robust and provide stability," said Himanshu Srivastava, Senior Analyst Manager Research at Morningstar India.
According to a report by mutual fund tracker Morningstar, DIIs poured in Rs 4,559 crore in equities last month. This comes following a net inflow of Rs 9,247 crore in April.
Prior to that, they had pulled out Rs 4,395 crore in March.
In comparison, foreign portfolio investors (FPIs) infused Rs 7,711 crore in stocks last month.
"The most prominent reason for the FPI inflow is expectation from the government that it would speed up development and economic reforms in their last two years in office before going for elections in 2019.
"The government finalising GST rates and expectation that it will be rolled out on time in addition to forecasts of normal monsoon also led to positive sentiments," Srivastava added.
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