FPIs pump in $2.45 bn in just 4 trading sessions on improved sentiment

Sentiments driven by passage of GST bills, better manufacturing outlook

Foreign investors have pumped in a staggering $2.45 billion in capital markets in the last four trading sessions on the back of improved investor sentiments driven by passage of goods and services tax (GST) bills and growth in manufacturing sector.

This comes following a record net inflow of Rs 56,944 crore ($8.7 billion) last month, mainly on expectations that the Bharatiya Janata Party's (BJP) victory in recently held assembly polls would lead to faster reforms.

In February, Foreign Portfolio Investors (FPIs) had made a net investment of Rs 15,862 crore in equity and debt markets. Prior to that, FPIs had pulled out more than Rs 80,000 crore between October 2016 to January 2017.

A major boost to the investor sentiments came last week from the latest Nikkei India Manufacturing PMI data, which showed the factory output growth rising to a five-month high in March, indicating a further improvement in the health of India's manufacturing sector, experts said.

Besides, the Lok Sabha cleared four GST legislations last week, paving the way for the rollout of the new indirect tax regime from July 1, which has added to the positive momentum in the markets.

According to depository data, FPIs infused a net sum of Rs 4,995 crore in equities during April 3-7 and another Rs 10,882 crore in the debt segment, translating into a combined inflow of Rs 15,877 crore ($2.45 billion).

The markets were closed on April 4 on account of Ram Navami.

Geojit Financial Services Chief Market Strategist Anand James said: "The prospects of a gradual US rate hike looks to have improved the risk appetite. This should also mean, save a negative surprise from monsoon forecast, fourth quarter numbers should prompt investors to be forward looking".