FPI inflow in equity nears Rs 1 trillion in 2019,highest in six years

FPI inflow in equity nears Rs 1 trillion in 2019, highest in six years

In calendar year 2019, the net investment in Indian equities reaches nearly Rs 1 trillion mark due to pouring of investment in large-cap stocks from overseas investors. It is high when compared to previous six years. In this year, foreign portfolio investors pumped in a net Rs 99,966 crores ($14.2 billion). The inflow during the year is highest since calendar year 13, when they made a net investment of Rs 1.1 trillion nearly 20.1 billion  in equities.

There is sufficient growth in FPI due to rises in India’s total market cap to 155 trillion. In the fourth quarter of calendar year 19, FPI positioned faith in India by putting Rs 43,781 crore in October and December after pulling out 11,463 crores in Indian equities during the third quarter of calendar year 19 from the equity market.

The latest report by BNP Paribas reveals the total flows in six major Asian regions such as India, Philippines,Taiwan, Korea, Indonesia at $24 billion at the end of November 2019,compared to an outflow of  $16.7 billion in 2018.

From the third quarters of calendar year 19 foreign flows into Asian countries were positive consistently .Among these India was the first ($12.8 billion),second was Taiwan($9.1 billion)and Indonesia was the third($2.9 billion). Manishi Raychaudhari, head of equity research said that some factors such as continued rate cuts  and newly begun quantitative easing by the US Federal reserve, and ongoing liquidity expansion by other front line central banks are the catalyst for the revival in FII flows.

The impact of FPIs inflows was also reflected in the benchmark indices such as S&P BSE Sensex and Nifty 50.S&P BSE Sensex was raised up to 15 per cent and nifty 50 was raised up to 12 per cent and register double digit returns in calendar year 19 and it shows the second best performance when compared to past 5 calendar years.

In earlier years the S&P BSE Sensex and Nifty had rallied 28 per cent and 29 per cent respectively. During the calendar year 2019, mutual funds were pumped in 52,850 crores in equities and various securities .Among these  ICICI Bank, kotak Mahindra Bank, HDFC Bank and Bharti Airtel, was at an all-time high level at the end on September quarter and the market price of these shares were appreciate between 21 per cent and 56 per cent during the year.