New Delhi: VK Vijayakumar, chief investment strategist, Geojit Financial Services, on Saturday said FPIs are becoming consistent buyers in India, as shown by net buying of equities worth Rs 11,823 crore this month till March 8. He said that FPIs are becoming stable buyers in India. Big sellers in January and very modest buyers in February. There are mainly three reasons for this new interest in India.
India is making headlines in supply chain localization across various industries: Ashwini Vaishnav Advertisement Firstly, the Indian market is showing great resilience and there is buying at every dip.
FPIs have been forced to buy the same shares that they had sold at higher prices, which is a losing bet, he said. Second, US bond yields have been falling steadily (the 10-year yield has now fallen from 4.3 per cent to 4.08 per cent) and this has halted the switch from equities to bonds. He said the FPI strategy of selling equities in emerging markets to buy US bonds has stopped. Also read- AUM of mutual funds grows at the rate of 38 percent year on year in February.
Third, the Indian economy is growing at a better-than-expected rate, as GDP growth is likely to be around 7.6 per cent in FY2024, well ahead of other major economies. He said this would have a positive impact on corporate earnings and consequently the stock market. this positive
Growth and a continued flow of money into the market – both directly and through institutions – can keep the market resilient. However, high valuations are a matter of concern. He said valuations in the mid- and small-cap segment are excessive and inappropriate. Improvement in this segment is only a matter of time.
