V K Vijayakumar, Geojit Financial Services' Chief Investment Strategist, highlighted FPIs' substantial stock purchases in the banking and IT sectors, notably intensified post the Fed's signals of ending its tightening cycle and potential 2024 rate cuts, causing a crash in U.S. bond yields below 4 percent.
Anticipating continued FPI stock buying, he emphasized India's status as a top FPI investment destination. He noted a growing global consensus on India's favorable prospects among emerging economies, foreseeing sustained growth and potential wealth creation through the stock market.
Vijayakumar pointed out FPIs' investment alignment with India's growth potential and mentioned heightened enthusiasm for Indian government bonds following India's inclusion in the J.P. Morgan Emerging Market Bond Index. He expects increased interest in Indian bonds, especially after the significant correction in U.S. bond yields.
Key Points:
1. Chief Investment Strategist V K Vijayakumar highlighted a significant December development: Foreign Portfolio Investors (FPIs) have shown substantial interest in banking and IT stocks, a trend that intensified following signals from the Fed indicating an end to the tightening cycle and potential rate cuts in 2024.
2. The decrease in U.S. bond yields, notably the 10-year yield dropping below 4%, coincided with increased FPI investment particularly in banking and IT sectors, a trend expected to persist in the future.
3. India has emerged as a prime investment choice for FPIs, garnering recognition among global investors for its strong growth potential within the emerging economies, marking a near-consensus viewpoint in the international investing community.
4. V K Vijayakumar expressed optimism about India's growth trajectory, suggesting that this growth has the capacity to generate substantial wealth, particularly through stock market investments, motivating FPIs to capitalize on this potential wealth creation.
5. He also noted heightened enthusiasm surrounding Indian government bonds, particularly after India's inclusion in the J.P. Morgan Emerging Market Bond Index. With U.S. bond yields correcting significantly, Indian bonds are expected to attract more investments, with some institutions potentially initiating purchases already.
(With Agency Inputs)
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