Of late, there have been visible changes observed in foreign investors' behavior in the Indian financial markets. For some months now, foreign institutional investors were continuously offloading equity. Last week itself turned out to be a big turn, as FIIs pumped Rs 11,730 crore into the Indian equity market. This was a big turnaround from the previous months, more so in May, where selling by FIIs in equities was more than Rs 40,000 crore, the highest monthly in 2024 so far.
Data from depositories indicate that till June 14, the net outflow of FIIs from the equity segment was at Rs 3,064 crore. In just the period between June 3 and June 7, foreign investors sold equities worth Rs 14,794 crore. At the same time, FIIs have been favoring the debt market, investing Rs 5,700 crore in debt till mid-June.
Experts in the industry say that this growing interest of FIIs in the debt market is because of India's induction in global bond indices. This was a bit strategic, in sync with the evolving investment strategy for these foreign investor classes amidst changing market dynamics.
While the outflows from Indian equities stand at about Rs 26,428 crore by FIIs so far in 2024, the very same money has ploughed roughly about Rs 59,373 crore into the debt market. And despite all of these financial juggernauts, the Indian bourses have not shown any tiredness. Only recently did both the benchmark indices, Sensex and Nifty, touching record highs of 77,145 and 23,490 respectively.
During the period, the Nifty Midcap and Smallcap indices rose sharply and rose by around 4% and 5%, respectively. This reflects elements of a broader resilience and optimism with which the Indian stock market is carrying through at a time when investor sentiment was variable and strategic reallocations were taking place.
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