FPI inflows hit an 11-month high of over Rs20,000 cr in September

Foreign portfolio investors pumped in more than Rs20,000 crore ($3 billion) into the secondary markets in India in September, the highest in 11 months.

This is also the third consecutive month that saw net inflows of investments into both equity and debt, figures with market regulator Securities and Exchange Board of India (Sebi) showed.

Sebi expects the trend to continue in the coming weeks with well-regulated foreign investors also getting to invest directly in Indian corporate debt market.

According to depository data, net investment by FPIs in Indian equities in September stood at Rs10,443 crore while investments in debt stood at Rs9,789 crore, taking the total inflow to Rs20,233 cror.e

This was the highest net inflow in the capital markets since October 2015 when FPIs had infused Rs 22,350 crore.

The flurry of capital inflows is attributed to factors such as sound progress in roll-out of GST, better corporate earnings and the US Fed's decision not to lift interest rates.

Investor sentiment also improved after the current account deficit (CAD) narrowed sharply to just $300 million, or 0.1 per cent of GDP, in the June quarter and domestic passenger vehicle sales growing for the 14th straight month in August, say market analysts.

The latest inflow has taken the FPI investment in equities to Rs51,293 crore in 2016 while FPI investments in the debt market stands at Rs2,441 crore, adding up to a net inflow of Rs53,734 crore.