Why Are Foreign Investors Returning to Indian Markets?
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Synopsis
In a notable comeback, foreign investors are resuming their purchasing spree in Indian stocks, buoyed by robust domestic buying. This article explores the growing investor confidence, significant market movements, and the impact of recent monetary policies. Discover how these developments are reshaping the Indian financial landscape.
Key Takeaways
- Foreign Portfolio Investors have resumed purchasing Indian stocks.
- Domestic Institutional Investors remain active buyers.
- The RBI cut the repo rate to 5.5 percent.
- Both the Nifty and Sensex closed higher for three consecutive days.
- Recent regulatory measures are boosting investor confidence.
Mumbai, June 7 (NationPress) Foreign Portfolio Investors (FPIs) emerged as net purchasers of Indian equities on Friday, acquiring shares valued at Rs 1,009.7 crore, based on the latest provisional data from the National Stock Exchange (NSE).
This development signifies a positive shift as investor confidence continues to rise. Domestic Institutional Investors (DIIs) also stayed active, making purchases for the 14th consecutive session, with investments totaling Rs 9,342.5 crore in stocks.
A notable highlight of the day was a significant transaction by Bajaj Holdings and Investment Limited, which divested shares worth Rs 2,002.2 crore in Bajaj Finserv Limited through a block deal.
This transaction involved the sale of 1.04 crore equity shares, which accounts for 0.65 percent of Bajaj Finserv's paid-up capital.
Earlier in the day, the promoters of the company had also executed a substantial share sale in a pre-market transaction.
Market momentum was further strengthened following the Reserve Bank of India’s Monetary Policy Committee's decision to lower the repo rate by 50 basis points, reducing it to 5.5 percent.
This decision is anticipated to lower borrowing costs and bolster economic growth. Reflecting this optimistic outlook, the benchmark indices concluded higher for the third consecutive day.
The Nifty rose by 252 points, or 1.02 percent, finishing at 25,003. The Sensex also gained 746.95 points, or 0.92 percent, closing at 82,188.99.
Throughout the trading session, both indices reached impressive heights, with the Nifty peaking at 25,092.50 and the Sensex touching 82,299.89.
Strong performances from firms like Eternal Limited and Shriram Finance Limited played a crucial role in driving this weekly rally.
The Nifty recorded an increase of over 1 percent this week, while the Sensex also climbed nearly 1 percent, breaking a two-week losing streak.
Experts suggest that recent actions by market regulators and the central bank have enhanced the attractiveness of the investment landscape.
Manoj Purohit, a partner at BDO India, emphasized that measures such as extending the deadline for disclosure rules and relaxing restrictions on foreign investment in corporate debt are fostering confidence among international investors.
“These initiatives are viewed positively for both equity and bond markets. As global trade conditions improve and India maintains robust economic fundamentals, investor sentiment remains favorable,” Purohit remarked.
Point of View
I observe a promising shift in India's investment landscape. With foreign investors returning and domestic buying remaining robust, it reflects a growing faith in the Indian economy. Recent regulatory measures have significantly enhanced market appeal, suggesting a potentially bright future for investors in the region.
NationPress
07/06/2025
Frequently Asked Questions
What are the recent trends in Indian stock markets?
Foreign Portfolio Investors have become net buyers, acquiring significant shares, while Domestic Institutional Investors continue to be active, indicating growing investor confidence.
How did the Reserve Bank of India's actions influence the market?
The RBI's decision to cut the repo rate by 50 basis points has made borrowing cheaper, which is expected to support economic growth and positively impact market sentiment.
What key transactions took place recently?
Bajaj Holdings executed a block deal selling shares worth Rs 2,002.2 crore in Bajaj Finserv, underlining significant market activity.
