Overseas flows into domestic equities this month were the highest in 12 months. So far this month, foreign portfolio investors (FPIs) have bought stocks worth $1.86 billion, the highest since March 2018 when they had pumped in over $2 billion. Since then, foreign flows had worsened.
FPIs have been taken out money in seven out of 12 months. The reversal in overseas flows this month will boost investor sentiment, which has been hit due to escalation in cross-border tensions between India and Pakistan.
The latest flow tally needs to be taken with a pinch of salt. The market has seen single-day FPI investment of $1.7 billion, the highest in 4 years. This was on account of share sale by Dutch bank ING Group in Kotak Mahindra Bank.
“High inflow tally this month isn’t necessarily due to change in sentiment. FPIs continue to remain cautious ahead of elections,” said an analyst.