Foreign investors land on positive domestic and global cues

Foreign Portfolio Investors (FPIs) became net buyers in the Indian equities market for the week ended Nov 7, following positive global and domestic reforms which resulted in bullish sentiments.

International and domestic markets remained in the positive in the last one week mainly due to steps taken by central banks around the world. Foreign investors went on a buying spree by stocking-up shares worth $718.51 million.

For the week ended Nov 7, the FPIs massively bought stocks worth Rs.4,411.93 crore or $718.51 million, according to data with the National Securities Depository Limited (NSDL).

"Equity valuations will remain at elevated levels because of the strong flows from both FIIs and domestic investors. The superior returns generated by equities over other asset class will also lead to higher flows in equities in future," said Rajesh Iyer, head of investment advisory services at Kotak Wealth Management.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

For the week ended Oct 31, the FPIs had bought stocks worth Rs.2,328.46 crore or $379.21 million, data with NSDL showed.

The FPIs were net buyers in the week ended Oct 24. They bought shares worth $42.85 million, or Rs.2,817.29 crore, on Oct 24.

Positive international cues were cited as a major cause for FPIs buying spree such as the sharp correction in crude prices, improved growth in US, liquidity easing by Japan and diminished possibilities of an immediate increase in US interest rates.

Back home, Indian markets consolidated post the recent rally, which has come about on the back of renewed optimism on fiscal reforms. The focus will consistently remain on further reform initiatives during the winter session of parliament which will be closely watched for GST and land reforms.

Buoyed by the strong FPI sentiment, the benchmark Sensex made marginal gains in the truncated week ended Nov 7. The index was up with a marginal gain of 2.8 points or 0.01 percent.

The benchmark Sensex was up by 0.01 percent in the week ended Nov 7 from its previous weekly close on Oct 31. The index closed at 27,868.63 points, while it had ended trade at 27,865.83 points on Oct 31.