The domestic stock market performed well in December on the back of strong capital inflows from foreign portfolio investors (FPIs), who injected a whopping Rs 66,134 crore last month. Nifty had ended last month with an increase of nearly 8%.
Dr. VK Vijayakumar, Chief Investment Strategist geojit financial services It said the sharp rise in the market in December coincided with a surge in FPI inflows, with net inflows reaching Rs 58,372 crore. Adding investments made through the primary market, FPI inflows in December stood at Rs 66,134 crore, Vijaykumar said.
In December, FPIs were big buyers in financial services and IT, and also made purchases in sectors such as automobiles, capital goods, oil and gas, and telecom, Mr. Vijaykumar highlighted.
Analysts at Geojit said the last two months of 2023 saw significant investment trends, driven by a sharp decline in US Treasury yields and a weaker dollar. He added that FPI inflows, which were negative in the three months ended December, sharply turned positive last month.
According to StockEdge, foreign portfolio investors net-bought Indian equities worth Rs 1.77 billion in 2023, including both primary and secondary markets. This was the highest ever inflow from an FPI in rupee terms.
On a rupee basis, this was a record high, but on a dollar basis, the inflow in 2023 was $21.23 billion, the second largest after 2020. Almost one-third of the inflows occurred in December alone, which was also the highest monthly inflow. It was sighted in 2023.
Mr. Vijaykumar expects this phenomenon to continue in 2024, as further declines in U.S. interest rates could lead to increased purchases in 2024, especially in the early months leading up to the general election. is high, and large-cap stocks will benefit greatly.
He also expects FPI inflows into fixed income products to accelerate in 2024.
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