Rs 6700 crore in one month! Why foreign investors are bullish on India

Foreign investors have pumped in a little over Rs 6,700 crore into the Indian capital markets so far this month on improvement on the macro front, better corporate earnings and correction in the mid and small-cap space.

The latest inflow comes following a net infusion of over Rs 2,300 crore in the capital markets -- both equity and debt -- last month. Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.

According to the latest depository data, foreign portfolio investors (FPIs) pumped in a net sum of Rs 2,048 crore into equities during August 1-24 and a net amount of Rs 4,662 crore into the debt market, taking the total to Rs 6,710 crore.

After three months of huge outflows from April till June, analysts said it is encouraging to see FPIs making a comeback in July and August.

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"The recent net inflow could be attributed to improvement on the macro front, better earnings from corporate, correction in the mid and small-cap space and positive observations of IMF on India," said Himanshu Srivastava, Senior Analyst ? Manager Research at Morningstar.