FPIs scale up buying Indian stocks after meeting with Modi | Economic Times

Mumbai: Foreign Portfolio Investors (FPIs) have stepped up purchases of Indian stocks in the past six trading sessions following a meeting between Prime Minister Narendra Modi and top overseas funds on November 5. These investors have pumped in close to Rs 30,200 crore since the meeting — where the government showcased recent reforms — as against Rs 21,826 crore in the whole of October ahead of an increase in India’s weightage on the MSCI indices by November-end.In November so far, FPIs have invested Rs 32,777 crore in domestic stocks, driving the Sensex and Nifty to record highs recently.Since November 5, the average daily purchases by FPIs of Indian stocks have gone up to Rs 4,300 crore as against Rs 900 crore in October. In September, there was a total outflow of Rs 5,690 crore.Global fund managers, who attended the virtual meeting, were keen to increase their investments in India in the days ahead, said a government official.“Lot of investors appreciated the reforms undertaken in agriculture and labour markets and appreciated the opportunities India offered,” the official said. Modi told the fund managers in the interaction that he is open to any feedback the investors may have, according to the official. The Prime Minister will also have a virtual interaction with more than 15 investor groups soon.Modi’s pitch to global investors comes amidst loose monetary policy followed by global central banks that has led to a chunk of that liquidity entering emerging market. Joe Biden’s win the US Presidential elections and the likelihood of a Covid-19 vaccine soon too boosted risk-on sentiment.Indian markets have surged around 70 per cent from their lows in March and hit record highs during the hour-long special Muhurat trading session on Saturday.Sensex closed at 43,637.98 after hitting an all-time high of 43,830.93 during the session. Nifty touched an all-time high of 12,828.70 on Saturday.A stable count of Covid cases in India, improvement in some high frequency indicators and better-than-expected September quarter results have also helped market run over the last few weeks.“The outcome of the US Presidential elections, several reports of Covid-19 vaccine entering Phase 3 trials, strong Q2FY21 earnings and strong inflows have catapulted markets beyond the pre-Covid-19 crash levels...India stands tall among the Emerging Markets (EM), attracting $6.5 billion of foreign flows during these difficult and unprecedented times,” said Elara Capital in a recent note.The addition of several stocks in the MSCI indices have boosted flows into India. Another Rs 30,000 crore is expected from overseas passive funds by the month-end as they buy stocks to align their holdings to the new MSCI index weights. The highest that overseas investors have pumped into Indian stocks in a month was Rs 36,927 crore in March 2019. MSCI Global has added 12 Indian stocks including Kotak Mahindra Bank and YES Bank to the MSCI India index in its semi-annual index review on Tuesday.