Himanshu Srivastava, associate director - manager research, Morningstar India said that FPIs
have adopted a "cautious stance" with respect to investment in Indian markets.
There is a surge in coronavirus cases globally, tension is increasing between the US and China, and Indian economy is still limping.
"These may act as a deterrent for foreign investors," he said. However, he noted that a high quantum was invested by FPIs
in equities during the last week.
Harsh Jain, co-founder and COO at Groww noted that FPIs are investing majorly in the insurance and IT sector.
"Pharma and consumer durables are also gaining popularity," he added.
The IT sector has posted good numbers and most of the companies have performed more or less in line with the expectations, he noted. This might add to the sector's appeal.
Regarding the debt segment, Srivastava said, "FPIs are yet to gain the level of conviction on Indian debt markets to invest substantially. The pattern of FPI flows into the debt markets indicate that, given the current scenario, they are probably not finding the segment an attractive investment destination."
Going forward, he said the FPI flows would be dictated by several factors as the scenario globally continues to evolve. "On the domestic front, the challenges with respect to rising COVID-19 cases and recovery of economic growth remains," he added.