FPIs stay bullish on India, invest over Rs 37 billion in debt markets

Foreign investors have put in over Rs 37 billion in the Indian debt markets in the last five trading sessions as interest rates are not increasing in the US.

This comes following a net outflow of Rs 127.5 billion in the last two months (February-March) probably due to the surge in interest rates increasing in home markets as well as INR depreciation outlook due to crude price and fiscal deficit.

Prior to that, foreign portfolio investors (FPIs) had pumped in over Rs 85 billion in January.

According to depository data, FPIs invested a net sum of Rs 37.06 billion ($570 million) in the debt markets during April 2-6.

Besides, they infused Rs 940 million in the stock markets during the period under review.

Explaining the reason for inflow in debt markets, Harsh Jain, COO at Groww.in, said interest rates are not increasing in a hurry in the US.

"March was a good time to sell for smart investors as yields were high in India which have reversed significantly in last few days and hence are attracting investments," he added.

Going ahead, both equity and debt inflows will see volatility in the ongoing financial year, in terms of investment by FPIs a result of global trade tensions, Fed rate hikes in US as well as elections in India, Vidya Bala, head of MF Research at FundsIndia.com said.