Foreign Investors Inject ₹31,000 Crore into Indian Stocks as Market Recovers

Synopsis

In the last six trading sessions of March, foreign investors have infused nearly ₹31,000 crore into Indian equity markets, driven by attractive valuations and strengthening macroeconomic indicators. The Nifty index has seen a surge of around 6% during this period, signaling a positive shift among investors.

Key Takeaways

Foreign investors have invested ₹31,000 crore in Indian markets.
The Nifty index increased by 6% in the last six sessions.
The strengthening rupee has boosted investor confidence.
Future FPI investments depend on upcoming tariff announcements.
SEBI raised ownership disclosure thresholds to ₹50,000 crore.

Mumbai, March 30 (NationPress) Foreign investors have poured approximately Rs 31,000 crore into the Indian equity markets over the past six trading sessions in March, based on the most recent depository data.

This influx of capital is largely attributed to appealing stock valuations, a stronger rupee, and favorable macroeconomic indicators.

The resurgence of foreign portfolio investors (FPIs) as purchasers has significantly aided the stock market's recovery.

The benchmark Nifty index has climbed by nearly 6 percent during this timeframe, showcasing renewed investor confidence.

The shift in FPI strategy from selling to buying is shaped by various factors, including a 16 percent correction in stock prices since the September 2024 peak, the recent strengthening of the rupee, and robust economic indicators such as GDP growth, industrial production, and inflation.

This new influx of funds has also contributed to reducing the total outflow for March to Rs 3,973 crore, per depository data.

Experts opine that future FPI investments will hinge on the upcoming announcement of reciprocal tariffs by US President Donald Trump on April 2.

If the tariffs are not overly severe, the market rally could persist, experts suggest.

"This week has marked a turnaround, with FPI inflows starting on a positive note, rejuvenating the Indian market despite the financial year's final week, which typically sees significant profit booking," stated Manoj Purohit of BDO India.

He noted that some key macroeconomic issues include the US's announcement regarding reciprocal tariffs, ongoing military tensions in the Middle East, rising inflation, diminished consumption, and inflated valuations.

Moreover, a significant decision by the Securities and Exchange Board of India (SEBI) has motivated FPIs to invest.

SEBI has opted to raise the threshold for granular beneficial ownership disclosures from Rs 25,000 crore to Rs 50,000 crore.

"FPIs with over 50 percent of their portfolio in a single corporate group will still adhere to the previous limit. This should ideally restore the much-needed volume in trades and enhance market liquidity," Purohit expressed.

This decision followed consultations with major banks regarding the restrictions on participatory notes (P-Notes) trading volume.