New Delhi: Foreign portfolio investors turned aggressive buyers in the last few days of April.
FPIs have bought equity worth Rs 9,752 crore till April 29.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said FPIs appear to have changed their investment strategy in India in recent days.
While they were sellers in the initial three months of this year, they have turned buyers in April and aggressive buyers in the last few days of April. FPIs have bought equity worth Rs 9,752 crore till April 29.
Vijayakumar said an important macro factor that has tilted the FPI approach is the appreciation in rupee.
Rupee which had touched a low of 82.94 (INR) to the dollar in late February this year has now appreciated to INR 81.75 to the dollar. India’s Current Account Deficit is declining and if this trend continues the rupee may appreciate further.
FPIs are likely to bring more inflows into India in this context. FPIs have been buying in financial services and auto and auto components, he added.
The monthly economic review for March released by the finance ministry said the narrowing of the CAD, accompanied by a rising inflow of foreign portfolio investment (FPI) resulted in an increase in foreign exchange reserves by the end of third quarter of 2022-23.
With forex reserves further increasing by the end of 2022-23, prospects of a still narrower CAD in the fourth quarter of 2022-23 are bright.
Even as external stability strengthened, factors contributing to internal stability also improved.
Fiscal parameters for the Centre and the states in 2022-23 have been robust, as seen in solid revenue generation and improvement in the quality of expenditure, the document said.
(IANS)
