Foreign investors have injected over Rs 33,600 crore into Indian equities this month, driven by expectations of ongoing policy reforms, strong economic growth, and a favorable earnings season. However, they withdrew more than Rs 7,200 crore from equities in the last three trading sessions (July 24-26) following the government's increased taxes on Futures and Options trades (F&O) and capital gains from equity investments in the Budget.

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"FPI investment in equity through 26th July stands at Rs 33688 crores. During the same period FPI investment in debt stands at Rs 19222 crores. For 2024 through 26th July FPI investment in equity stands at Rs 36888 crores and the investment in debt stands at Rs 87846 crore," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Foreign portfolio investors (FPIs) have recorded a net inflow of Rs 33,688 crore in equities up to July 26, following a Rs 26,565 crore inflow in June, driven by political stability and a strong market rebound. 

Prior to this, FPIs had withdrawn Rs 25,586 crore in May due to election uncertainties and over Rs 8,700 crore in April due to concerns over changes in India's tax treaty with Mauritius and rising US bond yields.

V K Vijayakumar of Geojit Financial Services also said that a notable trend over the past 30 months is that whenever FPIs have been consistent sellers, domestic institutional investors (DIIs) have been consistent buyers. The significant inflow into domestic mutual funds and the increasing role of retail investors have bolstered domestic investors compared to their foreign counterparts, according to 

In addition to equities, FPIs have invested Rs 19,223 crore in the debt market during this period, bringing the total debt investment to Rs 87,847 crore this year. With the inclusion of international bond indices, foreign flows into the Indian bond market are expected to rise, potentially lowering G-Sec yields.

(With inputs from agencies.)

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