FII inflows at 6-month high of Rs 33,688 cr in Jan

Overseas investors pumped in a staggering Rs 33,688 crore in capital markets last month, making it the highest investment in six months owing to easing inflation and rate cut by Reserve Bank of India (RBI).

Foreign Institutional Investors (FIIs) bought shares worth Rs 12,919 crore ($2.1 billion) in January, while they bought debt worth Rs 20,769 crore ($3.34 billion), taking the total investment to Rs 33,688 crore ($5.45 billion), latest data with Central Depository Services Ltd (CDSL) showed.

This is the highest investment since July when overseas investors had poured in Rs 36,046 crore.

These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.

Market analysts attributed the huge inflow to low inflation levels and rate cut by RBI. The central bank on January 14 surprised market participants with a 25 basis point rate cut.

Besides, foreign investors are betting on Indian capital markets on expectations of more rate cuts by the central bank.

In 2014, the net investment by overseas investors into the debt markets was Rs 1.16 lakh crore, while in equities it stood at Rs 98,150 crore.

Overall, net investment by foreign investors stood at Rs 2.58 lakh crore in 2014.