New Delhi, Oct 29 (PTI) Foreign investors have pumped inclose to USD 3 billion in the Indian capital markets so farthis month due to "high nominal and real yields" and stablemacroeconomic conditions.
Interestingly, most of the funds have been infused in thedebt markets.
According to the latest depository data, FPIs invested anet sum of Rs 2,806 crore in the stock markets and another Rs15,132 crore in debt, taking the total to Rs 17,938 crore(USD 2.75 billion) during October 3-27.
This follows a net outflow of over Rs 10,000 crore fromthe capital markets last month. Prior to that, they had pumpedin Rs 1.78 lakh crore in the preceding six months (February-August).
"Indian bonds remain attractive on high nominal and realyields as well with the backdrop of macroeconomic stabilityand hence it continues to attract FPIs," Quantum Adviors HeadFixed Income and Alternatives Arvind Chari said.
Another major reason could be increase in limits inIndian bonds by Reserve Bank of India (RBI) and capitalmarkets regulator Securities and Exchange Board of India(Sebi) by Rs 14,200 crore for October-December 2017.
FPIs, which had earlier exhausted their limits in Indiangovernment securities and corporate bonds, tapped thisopportunity and rushed to buy these securities.
With regard to lower equity inflows, Chari said the samecan be attributed to profit booking by FPIs amid highvaluations.
"Indian equities on the other hand remain extremely overvalued even from a global emerging market perspective andhence witnessing lower inflows compared to bonds," he added.
PTI SP ABMSBT.
This is unedited, unformatted feed from the Press Trust of India wire.