Equities Drops : In August, foreign investors made a cautious investment of Rs 7,320 crore in Indian equities. In August, foreign investors took a cautious approach, investing Rs 7,320 crore in Indian shares due to the high market valuations and the unwinding of the Yen carry trade following the Bank of Japan’s interest rate hike. Based on data from the depositories, this investment was much less than Rs 26,565 crore in June and Rs 32,365 crore in July.
While FPI interest is projected to remain strong in September, the flows would depend on a number of factors, including sectoral preferences, market values, economic indicators, domestic political stability, and the appeal of the debt market. Waterfield Advisors’ Director of Listed Investments, Vipul Bhowar, stated.
Foreign Portfolio Investors (FPIs) made a net investment of Rs 7,320 crore in Indian shares in August, according to statistics with the depositories. The high valuation in the Indian market is the primary cause of the low FPI interest when compared to the previous two months.
The Indian market is currently the most expensive in the world, with the Nifty selling at more than 20 times expected FY25 earnings. According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, FPIs prioritize economies outside than India because they have the opportunity to invest in more cheaper markets. Furthermore, according to Bhowar, the unwinding of the Yen carry trade on August 24 had a big influence on FPI behavior and caused a huge sell-off in Indian equities.
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