Business News: Only three countries contribute over 50% of all FPIs flowing into India, according to a data released by the National Securities Depository Limited. Out of the 44.62 lakh crores investment recorded, Rs.15.38 lakh crores of investments were from the U.S, followed by Mauritius at Rs.5.29 lakh crores and Luxembourg at Rs.3.74 lakh crores.
FPIs in India:
When it comes to equities, the U.S holds the number one position with nearly 37% of the total followed Luxembourg at 29%, Mauritius contributing 11% and Luxembourg contributing a share of 11%. In terms of hybrid investments, the U.S and Singapore make the majority contributions with 41% and 28%.
According to Care Ratings, liberal policies of rich and investing nations benefit developing nations like India. And, since the pandemic took over the world economy has already started looking up after getting hurt badly due to economic restrictions caused by the pandemic. Global stock markets look optimistic with the improving vaccination programmes everywhere.
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One part of Care Ratings Report exactly read that:
“This is reinforced by a fairly high coefficient of correlation between changes in Sensex and absolute FPI flows on a quarterly basis between March 2016 and December 2020. It was 0.64. This is also buttressed by a regression analysis which shows a coefficient of determination (which says what percentage of the variation in the Sensex can be explained by movements in FPIs) of 0.41 with the coefficient for FPI flows being significant at 0.0001629,”
It means that the consistent flow of FPIs into a country has a positive co-relation with the development of the country’s stock markets. One billion dollars of FPI over a period of three months shoots up the stock market by 1.6%.
In April, a total of Rs.4,615 crore FPIs were pulled out of Indian markets as COVID-19 cases were taking a sharp upward turn, followed by lockdowns and its restrictions on economic activities, making investors’ confidence loose. Out of the total Rs.4, 643 crores investments pulled out, Rs.28 crores were put back in debt segment.
Rs.17,304 crore in March, Rs.23,663 crore in February and Rs.14,649 crore in January, were the total number of FPIs invested in the past three months.
with inputs from Indian Express
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