FII Inflows Into Indian Equities Touch Five-Year High Of $11.4 Billion In January-June 2019

Net purchases of Indian equities by foreign institutional investors (FIIs) touched $11.4 billion in the January-June period for 2019, which is the highest level since the same six months in 2014, reports Hindustan Times.

This is a major turnaround from previous six months of the July-December period in 2018, when FIIs were actually net sellers in the domestic markets, pulling out $3.78 billion from the country.

Although the trend of net outflows seemed to be continuing in the early part of this year, FII funds poured in strongly once the election results came out in favour of the ruling BJP-led NDA alliance on 23 May.

However, Senior analyst and manager (research) at Morningstar Investment Adviser India, Himanshu Srivastava cautioned that FII inflows seemed to be again on their way to slowing down with increasing crude oil prices and US-Iran tensions, among other reasons.

“Also, with elections over and euphoria around it subsiding, the focus will now be on the steps that the government takes in order to bring the economy back on track. This, too, resulted in the slowdown of flows. Foreign investors would have adopted a wait-and-watch stance ahead of the budget announcement on July 5. The focus there would be on the government’s roadmap towards fiscal consolidation, the fiscal deficit target, and the steps it would take to propel economic growth,” Srivastava added.