India has seen over £2 billion foreign investment into the capital market in September, making it the highest inflow in 11 months. Sentiment turned better after the current account deficit narrowed sharply to just $ 300 million, or 0.1 per cent of GDP, in the June quarter and domestic passenger vehicle sales grew for the 14th straight month in August.
Experts said the trend would most likely continue in the coming weeks as regulator Sebi has decided to offer direct entry to well-regulated foreign investors for investing in corporate bonds. The latest surge of foreign capital is ascribed to factors like sound progress in rollout of GST, better corporate earnings and the US Fed's decision to not lift interest rates.
As per depositors' data, net investment by FPIs stood at £1.04 billion in equities last month, while the same for debt was £978.9 million, taking the total inflow to £2.02 billion. This was the highest net inflow in capital markets since October 2015 when FPIs had infused £2.23 billion. The latest inflow has taken FPI investment tally in equities to £5.13 billion in 2016, while the same for the debt market stands at £244 million, resulting in a net inflow of £5.37 billion.
