In May, the foreign investors pulled out massive Rs 25,586 crore from Indian equities amid uncertainty surrounding the outcome of Lok Sabha Election and outperformance of Chinese markets.
Notably, this was way higher than a net outflow of over Rs 8,700 crore in April on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields.
Advertisement
The election results, which will be out on June 4, could determine Foreign portfolio investments (FPIs) flow into Indian equities in the near future.
In March, the FPIs made a net investment of Rs 35,098 crore and Rs 1,539 crore in February, while they took out Rs 25,743 crore in January, data with the depositories showed.
Experts have predicted that in the medium term, US interest rates will exert more influence on FPI flows.
Robust GDP growth, manageable inflation and political stability can create a positive outlook for the Indian economy.
India’s GDP growth rate in the quarter ending March 31, 2024 grew by 7.8 per cent. GDP growth provisionally stands at 8.2 per cent for FY24, as compared to the growth rate of 7 per cent in FY23.
The recent exit polls suggested the Bharatiya Janata Party-led alliance will clinch substantially more seats than the 272 required for a majority.
Most pollsters predict the BJP and its allies to win between 350 and 400 seats. In 2019, the alliance won 352.
The vote count for the Lok Sabha election will be held on Tuesday.
