FPIs net buyers of Rs 40,000 crore worth of shares in August till now

22 Aug 2022 , 08:08 AM

Foreign investors are turning out to be the biggest bulls on the Indian stock market, at least for the time being, as domestic institutional investors are busy collecting the harvest. According to NSDL data, FIIs have purchased stocks worth more than Rs40,770 crore so far this month.

According to news reports, FIIs are returning to emerging markets (EMs) like India as US inflation shows indications of peaking and the future strength of the US dollar is uncertain.

Because domestic investors participated heavily, the fall in Nifty was relatively less when FII selling was at its highest and many global markets were in a bearish hold. Nifty is currently less than 850 points away from breaking all-time highs thanks to FII backing.

The movement of the US dollar, which had surged beyond 109 in late July to about 105 on August 11, but this week the greenback again crossed 108, may prove to be the strongest catalyst for capital movements in the near term. According to analysts, capital inflows may be affected if this flight to safety toward the US currency persists.

Bulls are expecting that continuous FII flows would make it simpler for the market to scale new heights before Diwali, despite the inflated valuations in India, which are a cause for concern.