Bond market bullish on FII and DII positive sentiments

On account of positive Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs), the Indian investment markets are highly bullish and scale new highs, especially the equity and bond market. Since equity markets are already at its highest levels, the bond market is expected to show more momentum than equities.

Speaking on the FII, DII effect on the Indian bond market Prakash Pandey, Head of Research at Fairwealth Securities said, "DIIs were in catch-22 in January-March quarter as the Indian Lok Sabah Elections were fast approaching. But, after the thumping victory of the incumbent Narendra Modi government, the DIIs have started to pump money in full swing. Similarly, the FIIs who were expecting better returns from the China markets have received a dent after the escalation of the trade tariff war between US and China. In such a scenario, the lower returns from the Chinese market may lure FIIs to park their money into the Indian markets."

Harsh Jain - COO & Co-Founder at Groww said, "The international investors were very vocal about the need for a stable government. FII investment in the debt category had been very volatile in the months of April and for the most part of May. After the declaration of the results in the last week of May, inflows into debt have been mostly consistent. Now all eyes are on the government's upcoming fiscal budget on July 5 presented by the new Finance Minister Nirmala Sitharaman. The government is expected to announce its plans to speed up the Indian economy. The government also comfortably met its fiscal target of 3.4%. The gap between the sovereign and AAA has been reduced. With a stable government and a new budget, the upcoming months look bright for fresh investments for quality bonds (AAA, sovereign, SDL)."