"The recovery in the markets post-Budget has largely been supported by DIIs (domestic institutional investors)," Ajit Mishra, vice-president (research) at Religare Broking Ltd, said.
Finance Minister Nirmala Sitharaman in the Union Budget proposed to remove dividend distribution tax (DDT) on companies and, henceforth, the tax burden will be shifted to recipients at the applicable rate.
Besides, she also said certain government securities will be open for foreign investors adding that the Centre plans to increase investment limit for FPIs in corporate bonds from 9 per cent to 15 per cent.
However, the buying in equities has been nominal in February so far as "the subdued FPI sentiments are a result of coronavirus outbreak's impact on global economic growth," Mishra said.
Citing reasons for investment in the bonds market, analysts said the investment was largely on the back of the RBI maintaining an accommodative stance in its recent monetary policy review.
On the future course of FPI flows, Mishra said that "in the medium term, FPI flows should increase as the domestic economy rebounds and global concerns subside".
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