Ever since the US Central Bank cut its interest rates, there has been a tremendous boom in the stock markets of America and India. The special thing is that foreign investors have made a record in the Indian stock market. On Friday, foreign institutional investors made the biggest purchase in 3 years in the Indian stock market. They have spent more than Rs 14 thousand crores in the stock market daily.
According to Friday’s provisional data, this is the biggest daily purchase in the last three years and historically the eighth-highest purchase. FIIs made the biggest purchase in a day on May 6, 2020. On that day, foreign investors invested Rs 17,123 crore in the stock market in a single day.
How Much Investment Has Been Made In A Month
Dr VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services, said in a media report that the biggest reason for this FII purchase is the Fed’s 0.50 per cent cut in interest rates. The Fed rate is expected to fall continuously to 3.4 percent by the end of 2025. Bond yields in the US continuously decrease, motivating FIIs to invest in emerging markets like India. September saw the second largest investment so far in 2024; the last time such a big investment was seen was in March 2024. Till September 20 this month, the total FII investment has come to Rs 33,699 crore. The total FII investment in India in 2024 has been Rs 76,585 crore.
Why Did Investors Rush In?
Manoj Purohit of BDO India said that despite global uncertainties, the main reasons for the attraction of foreign investors in India include a balanced fiscal deficit, the impact of rate cuts on Indian currency, strong valuation and RBI’s approach to keeping inflation under control without rate cuts. FII buying is likely to continue in the coming days as well. Experts believe that in the current month, foreign investors can cross the figure of Rs 50 thousand crore in the Indian stock market.
Rise In Banking Stocks
Dr Vijaykumar said in a media report that banking stocks had risen after the news of a reduction in the credit-deposit gap. In this overvalued market, banking stocks are currently at the right value, so the buying trend in banking stocks may continue, increasing the index. There has been a flood of FII money. The Indian rupee rose by 0.4 per cent for the week ending September 20; this may further boost FII buying. The worrying thing is that valuations also increase as the market heats up.
