This revival follows significant outflows in the preceding months, with foreign portfolio investors (FPIs) pulling out a net Rs 21,612 crore in November and a massive Rs 94,017 crore in October – the worst monthly outflow on record.
Indian government bonds have beaten all of their emerging market peers except Argentina so far this year. While prudent government borrowing and the benchmark interest rate at a six-year high are helping, the market is also buoyed by expectations of as much as $40 billion of inflows from index inclusion.
At the same time, some investors appear to be losing patience, as can be seen from the net tally of new SIP account registrations for July being 15.16 lakh
Foreigner investors may continue pouring money into Indian stocks, driving benchmarks to new highs in an extended bull market, according to HSBC Holdings PLC.
This was way lower than an inflow of Rs 4,814 crore seen in the segment during 2021 and Rs 6,657 crore in 2020, data with Association of Mutual Funds in India (Amfi) showed.
This selling is despite the Sensex and Nifty trading near record highs. Over the last 15 sessions, the benchmark indices jumped over 6 percent
However, inclusion of Indian sovereign bonds in global bond indices, if and when that happens, may funnel flows into domestic debt.
Investors have been taking advantage of the correction in the market; also DIIs have been net buyers for 16 consecutive months even as FIIs have been net sellers.
Equity mutual funds saw an inflow of close to Rs 4,900 crore in January, taking the total fund infusion to about Rs 55,700 crore by 'optimistic' investors in the first 10 months of 2016-17 fiscal.
After four months of selling frenzy, overseas investors turned net buyers in February and pumped in over Rs 2,300 crore in the capital market over the last three sessions, enthused by clarity on FPI taxation.
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Mutual fund managers attributed the inflow in equity funds to the matured investor behaviour who are staying put and using volatility to invest additional money in to these schemes
In nine out of the 11 months till November, equity schemes saw more money coming in than going out. The not so good news—investors were not as enthusiastic about equity schemes this year as they were in 2015. Inflows of Rs 44,772 crore, were almost half of the Rs 90,603 crore received in 2015
Mutual funds registered an inflow of a staggering Rs 13,610 crore in equities in November, mainly on aggressive buying by fund managers due to a sharp plunge in stock markets.
The Reserve Bank of India (RBI) hiked the cash reserve ratio (CRR), the percentage of cash deposits that banks have to maintain with RBI – at 100% of the deposits (NDTL) accrued between September 16 and November 11 as incremental cash reserve ratio.
Foreign investors pumped in more than Rs 20,000 crore into the capital market in September, making it the highest net inflow in 11 months.
Equity mutual funds witnessed an inflow of Rs 6,505 crore in August, making it the highest in a year, mainly on account of optimistic investor sentiment.
Staying with the bullish momentum, foreign investors have deployed over Rs 7,700 crore in the Indian stock market so far this month, driven by global and domestic factors.
India witnessed inflow of a staggering USD 1.2 billion from listed foreign funds in July after seeing an outflow of USD 332 million in the preceding month, says a report.
With this, the total net inflow in MF schemes has reached Rs 1.84 lakh crore in the April-January period of the current fiscal. In comparison, MFs had witnessed an inflow of Rs 1.95 lakh crore in the year-ago period.
Mutual Fund (MF) is an investment vehicle that pools funds from many entities for investing in securities such as stocks, bonds, money market instruments and similar assets.
The country's 44 fund houses together had an average assets under management (AUM) of Rs 11.06 lakh crore at the end of December 2014, compared to Rs 13.39 lakh crore registered in December-end last year, as per latest data available with Association of Mutual Funds in India (AMFI).
A 50 basis points repo rate cut and slew of policy measures announced by the Reserve Bank in the recent monetary policy review could attract an average annual flow of Rs 48,000 crore in government bonds from overseas investors for the next few years, says a report.
Once a symbol of fickleness, inflows into local equity mutual funds began with a trickle in May 2014 but soon developed into a steady stream, holding steady even in the face of intense volatility that has been witnessed in markets recently.
Analysts expect inflows to accelerate further going ahead following the passage of the Insurance Bill in Parliament and assurances in the Union Budget to revisit controversial issues like General Anti-Avoidance Rule (GAAR).