FII inflows cross Rs 50K cr in a month for the first time

New Delhi, For the first time, buying by foreign institutional investors (FIIs) has crossed Rs 50,000 crore in a month in November.

There are six days still left to go in the month. Till November 24, FIIs have bought equities worth Rs 50,501.07 crore and on Tuesday they bought equities worth Rs 4,563.18 crore.

Nilesh Shah, Managing Director, Kotak Asset Management, said in a tweet, “For the first time FPI buying in equities has crossed Rs 50,000 Crore in a Month. And the month is not yet over.”

This funds binge by FIIs has led to Indian markets scaling new highs every passing day. While FIIs have been buying non-stop, domestic funds are selling off.

Hemang Jani, Head – Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services Ltd, said FIIs have made highest monthly buying in November 2020 in the last two decades. They have pumped in approximately Rs 50,989 crore in November itself and have invested approximately Rs 1.31 lakh crore in India year to date.

“This has helped the indices touch the 13K levels. The inflow increased considerably, especially after the end of the election in the United States and weakness in the dollar index.

Another major reason behind such a large inflow is the expected stimulus worth trillions of dollars from central banks to revive economies that are hit hard by the Covid-induced lockdown”, he added.

Nifty crossed the 13,000 levels for the first time ever and made record highs on Tuesday. Sensex also rose to a new life-time high.

Indian indices opened on record high levels on Tuesday, tracking gains in Asian peers, on the back of the progress made on the Covid-19 vaccine front and the prospects for a speedy global economic revival.

Jani said another factor that has contributed to the new highs is the blockbuster performance of corporates in 2QFY21.

“Few sectors where we have seen significant amount of growth are IT, pharma, metals, select private banks and NBFCs, and cement,” Jani said.

Commentaries of banks suggest that there is an improvement in growth and asset quality. The asset quality outlook is much better than initially feared as collection efficiency picked up sharply in 2QFY21.

He added that the gradual unlocking and the normalisation of supply chain issues for most auto OEMs led to volume recovery to meet underlying demand and inventory refilling. Cement demand recovery was attributable to strong rural and semi-urban demand and a pickup in government infra and road projects from September. Rural demand continued to outperform urban in 2QFY21, enabling sequential recovery for most companies in the consumer sector.

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