Foreign investors i.e. FPI have invested Rs 19,800 crore in the country’s debt market or bond market in January. This is the highest monthly level of FPI inflows into the bond market in 6 years. After the inclusion of Indian Government bonds in the JP Morgan index, the attraction of FPIs towards the Indian bond market has increased. On the other hand, FPI has withdrawn Rs 25,743 crore from Indian stocks in January amid rising bond yields in America.
According to depository data, FPIs have put a net amount of Rs 19,836 crore in the bond market in January. This is the highest monthly level of their investment since June 2017. At that time he had invested Rs 25,685 crore in the bond market. Earlier in December, FPIs had put Rs 18,302 crore in bonds, Rs 14,860 crore in November and Rs 6,381 crore in October.
Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that the net inflow of FPIs in India’s fixed income market was $ 2.39 billion in June. This investment has come due to the inclusion of Indian Government bonds in the JP Morgan index.
JPMorgan Chase & Co. had announced in September last year that it would add Indian government bonds to its emerging market benchmark from June 2024. This historic step will help India attract investment of 20 to 40 billion dollars in the next one and a half to two years.
Market experts say that Finance Minister Nirmala Sitharaman has announced in her budget speech that the fiscal deficit will be reduced to 5.1 percent of the Gross Domestic Product (GDP) in the financial year 2024-25. This announcement is also positive from the bond market point of view. Overall, in 2023, FPIs had infused Rs 1.71 lakh crore in equities and Rs 68,663 crore in the debt or bond market. In this way, his total investment in the capital market was Rs 2.4 lakh crore.