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FPIs back after Budget, invest Rs 7,860 crore

FPIs purchased stocks worth Rs 7,860 crore in March, thus reversing the trend of capital outflows witnessed in January and February this year.

After pulling out over Rs 16,600 crore in January and February, foreign portfolio investors are back in Dalal Street with a bang.

FPIs purchased stocks worth Rs 7,860 crore in March, thus reversing the trend of capital outflows witnessed in January and February this year. However, FPIs pulled out Rs 2,502 crore from the debt market in March. FPIs had pulled out Rs 11,126 crore from equities in January and another Rs 5,521 crore in February, leading to a decline in the Sensex ahead of the Budget.

According to analysts, capital inflows in March aided the Sensex stage a strong recovery. The Sensex had rallied by 1715 points since the presentation of the Union budget on February 28 with the government’s commitment on fiscal discipline aiding the rally.

On Friday, the Sensex rose 71.51 points or 0.29 per cent to settle the week at 24,717.99. The 50-unit Nifty 50 index rose 24.85 points or 0.33 per cent to settle at 7,510.20. The BSE Mid-Cap index rose 0.44 per cent, outperforming the Sensex.

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According to a Kotak report, in CY2016, listed funds withdrew $2 bn from India with February outflows of $ 0.5 bn. “India-dedicated outflows superseded emerging market activity as EM redemptions slowed down. Most of the FPI outflows from India can be attributed to listed funds,” it said.

Fund allocations to India by regional funds were down 0.6-0.7 per cent from September 2015 highs. Active GEM funds further brought down their allocations to India (from 14.4 per cent to 14 per cent in December). The January 2016 exodus can be attributed to banks, asset managers and broad-based funds based out of Mauritius, it said.

First published on: 14-03-2016 at 12:57:19 am
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