FPIs remain interested in Indian markets (Weekly Review)

Positive European cues coupled with healthy growth data from China and improving US economy prospects led the foreign portfolio investors (FPIs) to pump in Rs.5,748.07 crore or $930.99 million in the Indian equities market for the week ended Jan 23.

The Indian equities markets which were propelled to touch new highs due to the positive cues also took home one of the largest influx of funds from FPIs in the emerging markets (EMs).

Expectations of further reforms by the government in the upcoming budget led the FIIs to remain net buyers of equities for the second consecutive week.

"ECB's massive QE (quantitative easing) bodes well for fighting the deflationary forces in Euro region and taking growth to its intended levels. Considering US economy's recovery, the ECB's QE package has increased the optimism over improvement in global demand, albeit at a slow pace," said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.

"The QE package size have surprised the markets and EMs are placed well to receive the same. Having said that, two more crucial events are awaited, Greek vote and Fed meet. Once these events are past us, India is better placed to factor budget expectations and reforms."

The strong positive traction in the Indian markets attracted foreign investors in the week under review. The foreign institutional investors (FIIs) remained as net buyers in the capital market segment.

For the week ended Jan 23, the FPIs massively bought stocks in equity markets worth Rs.5,748.07 crore or $930.99 million, according to data with the National Securities Depository Limited (NSDL).

During the previous week (Jan 16), the FPIs were net buyers in the equity markets. They bought stocks worth Rs.2,206.52 crore or $356.78 million.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

The FPIs were net buyers in the equities market segment on Friday. They bought shares worth Rs.661.45 crore (Jan 22).

The massive foreign fund inflow led the barometer of Indian equities markets gaining more than four percent in the weekly trade ended Jan 23.

The buildup to the rally was led by the ECB announcement, and the past week's positive cues such as healthy industrial output numbers, slower inflation and the surprise rate cut by the apex bank.

All the positive cues led to both the main indices of the Indian equities market touching new record highs in the weekly trade.

The benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) touched a new high of 29,408.73 points on Jan 23, surpassing its previous record of 29,060.41 points reached during Jan 22 trade.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also touched a new high of 8,866.40 points on Jan 23 from its previous record of 8,774.15 points in Jan 22 intra-day trade.

The S&P BSE Sensex gained 1,156.95 points or 4.11 percent during the week ended Jan 23.

It closed the week ended Jan 23 at 29,278.84 points, while it had ended trade at 28,121.89 points on Jan 16.