MUMBAI: The foreign institutional investors’ (FIIs) buying continued through Indian stock exchanges this month to reach Rs 14, 435 crore (till December 13), as the economic growth stayed resilient.
The total buy figure from the FIIs -- including the exchange buying and buying through the ‘primary market and others category’ -- stood at Rs 22, 765 crore (till December 13), as per the National Securities Depository Limited (NSDL) data.
FIIs turning buyers in December after relentless selling in October and November has contributed to the recovery in the market from the November lows, experts said on Saturday.
FII buying has triggered a rally in largecaps, particularly in banking and IT sectors.
According to Vipul Bhowar, Senior Director-Listed Investments, Waterfield Advisors, the recent rally in the Indian market has been driven by positive political developments, a recovery in corporate stocks, increased foreign investments – both in primary and secondary markets and broad sector participation.
Historical data shows that the Nifty index has closed higher in 71 per cent of December since 2000, with significant gains noted in 2023 and 2020.
The Reserve Bank of India (RBI) enhanced liquidity by lowering the Cash Reserve Ratio (CRR), likely boosting market sentiment.
Additionally, consumer price index (CPI) inflation dropped to 5.48 per cent in November from 6.21 per cent in October, enhancing investor confidence and raising hopes for potential monetary policy easing by the RBI.
Going forward, easing monetary policy from central banks could help by lowering borrowing costs.
Favourable conditions and positive investor sentiment have supported recent market movements.
More domestic institutional and retail money are likely to move into the largecap banking segment. IT is another segment which is likely to do well and attract more FII buying, said experts, adding that this is a clear change in FII strategy in India and it can be argued that the stage of relentless FII selling is over.