FPI inflow at Rs 5,200 cr in Jan on earnings optimism

Foreign investors have pumped in over Rs 5,200 crore in the Indian capital markets this month so far on anticipation of recovery in corporate earnings and attractive yields.

This follows an investment of Rs 2 lakh crore in the capital markets (equity and debt) in the entire 2017.

Market experts, however, believe foreign portfolio investors (FPIs) may not be able to repeat this showing in 2018 as withdrawal of liquidity and rate hikes in developed economies pick up.

According to the depositories data, FPIs put in a net amount of Rs 2,172 crore in equities and Rs 3,080 crore in the debt markets during January 1-12 -- translating into a net inflow of Rs 5,252 crore.

"The inflow in current month can be attributed to anticipation of earnings recovery and attractive yields which is expected to further strengthen inflow from foreign investors in current financial year," said Dinesh Rohira, CEO of 5nance.

Morningstar India's Senior Analyst Manager (Research) Himanshu Srivastava said: "Given 2019 would not be far, the expectation of some other economic reforms from the government would be high. But the major for FPIs going ahead would be to see growth coming back in the domestic economy, which has not yet picked up contrary to the expectation".