Did the Indian Stock Market Attract Over Rs 30,000 Crore in Foreign Investments in May?
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Synopsis
In May, the Indian stock market welcomed over Rs 30,000 crore in foreign investments, fueled by the prospect of a US trade deal, a weaker dollar, and strong corporate earnings. This surge indicates a resilient economy amidst global challenges.
Key Takeaways
- Foreign investment in India exceeded Rs 30,000 crore in May.
- The equity market attracted Rs 19,860 crore.
- India's GDP growth rate reached 7.4 percent in Q4.
- India is expected to be the only economy with over 6 percent growth in FY 2025-26.
- The RBI's interest rate decision is critical for market stability.
New Delhi, June 2 (NationPress) Foreign investors injected over Rs 30,000 crore into the Indian stock and debt markets in May, driven by the potential for an upcoming bilateral trade agreement with the US, a weakened US dollar, and better-than-anticipated domestic corporate earnings.
Data from NSDL reveals that foreign portfolio investors (FPIs) contributed a total of Rs 30,950 crore across both equity and debt markets last month.
Of this amount, FPIs allocated Rs 19,860 crore to the equity market. This marks a significant increase compared to April, when foreign investors invested Rs 4,223 crore. However, net foreign investment remains in the red, totaling Rs 92,491 crore for 2025 due to sell-offs from January to March.
During the January to March 2025 period, FPIs offloaded equities worth Rs 1.16 lakh crore.
In May, FPIs also invested Rs 12,155 crore in the debt market, rebounding after a withdrawal of Rs 24,384 crore in April. Consequently, the debt market has seen a net foreign investment of Rs 36,648 crore in 2025.
The outlook for India's economy remains robust, with the GDP growth rate climbing to 7.4 percent in the fourth quarter (January-March) of FY 2024-25, compared to 6.2 percent in the third quarter of FY 25.
For the entire financial year 2024-25, the economic growth rate stands at 6.5 percent, as per the latest GDP figures released by the government.
The IMF forecasts that India will be the only economy globally to expand at over 6 percent in FY 2025-26, growing rapidly even as other nations grapple with economic slowdowns due to US trade tariffs.
The Reserve Bank of India's upcoming interest rate decision is highly anticipated, as any further reduction in policy rates could bolster market conditions over the medium term.
Point of View
I believe this surge in foreign investments reflects the enduring confidence in India's economic potential. The optimism surrounding trade agreements and corporate performance is crucial for sustaining growth, especially in a challenging global environment.
NationPress
13/06/2025
Frequently Asked Questions
What drove the recent foreign investments in India?
The recent foreign investments in India were driven by the prospect of a bilateral trade deal with the US, a weak US dollar, and positive corporate earnings.
How much did foreign investors invest in May?
Foreign investors injected over Rs 30,000 crore into the Indian stock and debt markets in May.
What is the current GDP growth rate of India?
India's GDP growth rate surged to 7.4 percent in the fourth quarter of FY 2024-25.
What is the outlook for India's economy?
India is projected to be the only economy growing at over 6 percent in FY 2025-26, as per IMF estimates.
How did FPIs perform in the debt market?
In May, FPIs invested Rs 12,155 crore in the debt market, recovering from a withdrawal of Rs 24,384 crore in April.
