Foreign Portfolio Investors Stage Comeback Amid Optimism In Indian Markets

Foreign portfolio investors have returned to Indian equities as net buyers in February, injecting over Rs 8,100 crore. This shift follows heavy outflows due to global trade tensions and currency volatility. The renewed confidence is driven by eased uncertainties, a stable interest rate outlook, and strengthened India-US trade relations.

In a positive twist for the Indian equity markets, foreign portfolio investors (FPIs) turned net buyers in the first week of February, injecting over Rs 8,100 crore. This marks a significant change after several months of withdrawals due to global financial uncertainties.

The market sentiments improved on the back of easing global conditions, improved interest rate expectations domestically, and promising trade relations with the United States, according to Himanshu Srivastava from Morningstar Investment Research India. January had seen outflows amid market turbulences such as volatile currency rates and geopolitical tensions.

Investment experts like Vaqarjaved Khan of Angel One attribute the change in sentiment to multiple factors, including supportive fiscal measures and stable US bond yields. The rupee's appreciation against the dollar also plays a crucial role, with hopes of further stabilization potentially drawing in more investments.

(With inputs from agencies.)