FPIs pump over Rs19,000-cr into India’s equity and debt markets in October

Foreign investors have pumped over Rs19,000 crore in the Indian stock markets in October so far - the highest level in six months - buoyed by positive returns both in dividend and capital gains.

At the current pace October investments could breach the March 2015 high of Rs20,723 crore as well.

Much of the fresh capital has been infused in the debt market on the back of a reduction in key RBI rates and a consequent reduction in banks' lending rates.

Net foreign fund inflows in the equity market stood at Rs5,545 crore between 1 October and 23 October while such flows into debt stood at Rs13,838 crore, adding up total foreign portfolio investment of Rs19,383 crore ($2.98 billion), depository data showed.

This is the highest investment by FPIs since April, when they had poured Rs15,333 crore into Indian securities markets.

If October investments continue at the current pace, FPI may breach the March figure Rs20,723 crore as well.

In the last two months prior to October, FPIs pulled out over Rs23,000 crore from the capital market (equities and debt) on fears of an economic slowdown in China, which triggered a global sell-off.

They withdrew Rs5,784 crore last month and another Rs17,524 crore in August, the highest net outflow by FPIs in a single month since 1997.

Now, with equities showing more strength and RBI increasing the FPI limit in government securities overseas investors have found a safer and more profitable way for parking their money.

Positive macro economic data, including a 6.4 per cent growth in industrial production - a nearly three-year high - in August also helped bolster investor sentiment.