According to depositories’ data, FPIs invested Rs 10,482 crore into equities and Rs 6,822 crore in the debt segment during March 1-31.
The total net investment stood at Rs 17,304 crore during the period under review.
Previously, overseas investors had invested Rs 23,663 crore in Indian markets in February and Rs 14,649 crore in January, on a net basis.
The rising cases of COVID-19 infections are affecting investments in the Indian markets, Groww co-founder and COO Harsh Jain noted.
Yet, the markets have been relatively much more stable during second wave due to the vaccination drive and economy looking up, he added.
Morningstar India Associate Director (Manager Research) Himanshu Srivastava said there was a gush of liquidity in the global financial markets after the US announced a pandemic relief package of USD 1.9 trillion which flowed into emerging markets like India.
Also, a rejig in some of the global indices led net inflows into Indian equities, he noted.
Besides, expectations of high economic growth, a massive vaccination drive and improvement in earnings growth were few such factors that make India a good investment destination from a long-term perspective, he further said.
Kotak Securities Executive Vice-President and Head (Fundamental Research) Rusmik Oza said, “On the back of higher growth expectation from US economy some of the export driven emerging markets like South Korea and Taiwan have started witnessing FPI flows… However, the overall, emerging market flows are still below expectation.”
In the future, rising COVID-19 cases in the country could be a dampener. The uncertainty around this could force FPIs to adopt a cautious stance and go into a wait and watch mode, Srivastava said.
“The focus for FPIs would be economic numbers and how soon India gains economic momentum back. Any surprise on that front could have an adverse impact on foreign flows,” Srivastava added.