foreign investors
Once again the movement of foreign investors has intensified in the Indian stock market. Foreign institutional investors (FIIs), who had been selling continuously for the last few months, now seem to be in a buying mood again. In the last nine trading sessions, FIIs have been net buyers in the Indian market and during this period they have invested more than $ 2 billion in shares. The recent rise has raised questions among investors whether this is just a temporary surge or a new rally is beginning in the market.
In a total of nine trading sessions between January 28 and February 6, FIIs were buyers in six days, while slight selling was seen in only three sessions. On February 9, foreign investors alone bought shares worth about Rs 2,200 crore. Along with this, domestic institutional investors (DIIs) were also seen in full enthusiasm and made purchases worth more than Rs 9,000 crore. The effect of this double buying by foreign and domestic investors was clearly visible on the market.
Why are foreign investors returning?
Market experts believe that after the recent sharp fall, the Indian stock market has now come to a more balanced valuation than before. Sensex and Nifty are currently trading around their 10-year average valuation, due to which foreign investors are again finding India attractive. Earlier, Indian markets were considered quite expensive compared to other markets in Asia. But after the recent correction, this gap has reduced to a great extent, due to which FIIs got the opportunity to enter again.
More enthusiasm in midcap and smallcap
This market boom was not limited to just big stocks. An even greater rise was seen in midcap and smallcap stocks. In the past few days, the midcap index rose by about 6% and the smallcap index rose by more than 6%. This means that risk appetite among investors is gradually coming back, which is considered the hallmark of any strong market.
Global factors are also giving support
According to experts, there are some factors at the global level too which are going in favor of India. The uncertainty related to the trade deal between America and India has reduced. Apart from this, stability in bond yields and expectation of further reduction in interest rates have increased the confidence of investors. If the dollar weakens and global liquidity increases, emerging markets like India can directly benefit from it.
Got confidence from RBI and budget
Keeping the interest rates stable by the Reserve Bank of India for the time being is also being considered a positive sign for the market. This indicates that inflation is under control and growth can be supported. At the same time, investors have also liked the emphasis given on infrastructure and long-term growth in the latest Union Budget. This makes India’s economic picture look strong.
Will this momentum last?
However, experts are also warning that it would not be right to reach any major conclusion so soon. This stance of FIIs will be sustainable only if there is a clear improvement in corporate earnings and the global environment remains supportive. At present, it can definitely be said that the return of foreign investors has definitely filled the market with new energy and the confidence of investors seems to be gradually returning.
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