May was the third consecutive of positive foreign inflow into equities at $1.7 billion, said the MOSL note, with DIIs investing in shares worth $7.9 billion during May, which was their 22nd month of net inflows, and the third-highest monthly buy figure ever.
The turnaround will happen as there is better clarity on government policy post the Union Budget, according to the brokerage's analysts.
Further data showing stable US economic activity with declining inflation will be supportive of softening bond yields and short-term interest rates and a weakening of the US dollar, all of which are positive for emerging market flows
FIIs pulled out over $29 billion in 10 months of sustained selling of Indian equities with June recording the peak at $6.4 billion. But in July, with the foreign investors turned net buyers. When read along with other signals, it indicates a bottom-out in sell-off, says a BofA report
FII sell-off | Taming inflation, freezing interest rates and a decline in recession expectations backed by better GDP data in developed markets could help reverse the trend of FII flows.
The question people often ask is what is this amorphous term called foreign fund flows. Classroom demystifies the concept of foreign fund flows and what they mean for our market and why they are important as well with Nirmal Jain of IIFL.
In a bid to check rupee‘s free falling against the US dollar, the Reserve Bank of India (RBI) on Monday hiked the limit of external commercial borrowing by USD10 billion. Moreover, the regulator also increased the limit of overseas investment in government bonds by $5 billion to $20 billion.
Foreign fund flows into India have reduced significantly as the country witnessed inflows of just USD 40 million in the last three months, the weakest among its emerging market peers, says a report.