As India has about 9 per cent weight in the MSCI EM index, a large portion of these inflows have found their way to India.
On Monday, FPIs invested another $545 million (Rs 3,810 crore), lifting the Sensex
by over a per cent and to their highest close since September 19, 2018.
ended at 37,054, while the 50-share Nifty
closed at 11,168.
The rupee closed at 69.89 against the dollar on Monday, its highest close since January 7.
From 2019 lows, the benchmark indices have jumped about 5 per cent, while the rupee has climbed nearly 3 per cent against the greenback. The mid- and small-cap indices have jumped 10 per cent and 15 per cent, respectively. The broader market is witnessing buying from wealthy investors, along with FPIs. The Fed announced a pause in the rate-hike cycle on January 31. Following this, most EMs saw a surge in foreign flows. India was late to join the party due to lingering domestic problems.
“India could not participate in the global rally due to many local factors, including issues in the wholesale financial market, geopolitical tension, and political uncertainty. In the past few weeks, these fears have reduced and we are finally participating in the EM rally,” said Saurabh Mukherjea, founder, Marcellus Investment Managers.