FPIs pulled out Indian equities worth Rs 25,743 crore last month owing to surging bond yield in the US. According to the data with the depositories, FPIs made a net investment of Rs 19,836 crore in the debt markets in Jan.This was the highest inflow since June 2017, when they infused Rs 25,685 crore. Before this, FPIs injected Rs 18,302 crore in the debt market in Dec, Rs 14,860 crore in Nov, and Rs 6,381 crore in Oct.
“Indian fixed income markets witnessed robust net inflows from FPIs to the tune of $2.4 billion in Jan on the back of inclusion of Indian govt bonds in the JP Morgan Index,” Himanshu Srivastava of Morningstar Investment Research India said.
JP Morgan Chase in Sept last year announced that it will add Indian govt bonds to its benchmark emerging market index from June 2024.
This landmark inclusion is anticipated to benefit India by attracting $20-40 billion in the subsequent 18 to 24 months. This inflow is expected to make Indian bonds more accessible to foreign investors and potentially strengthen the rupee, thereby bolstering the economy, he added.