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FPI Inflows into FAR G-Secs Rise Nearly ₹8,000 Crore as Rupee Gains, Yields Ease
Sentiment: NeutralHigh Priority
What Happened?
Foreign portfolio investors increased their investments in government securities under the Fully Accessible Route by nearly ₹8,000 crore in early November, driven by a stronger rupee and easing bond yields.
Key points
- FPI holdings in FAR government securities rose to ₹3.65 lakh crore on November 9 from ₹3.57 lakh crore on November 2.
- The Indian rupee appreciated from 94.90 to 93.74 against the US dollar during the same period.
- The yield on the 10-year benchmark government security eased from 7.315% to 7.178%.
- Brent crude oil prices decreased from over USD 105 per barrel to USD 96.41 per barrel.
- FPI investments in Indian government securities under FAR had previously dropped by ₹17,054.216 crore over three months.
Key insights
- The strengthening rupee may enhance returns for foreign investors holding Indian assets.
- Lower bond yields could attract more foreign investments in Indian government securities.
- The recent rally in AI-related stocks may further boost investor sentiment towards Indian equities.
Why it matters
The increase in FPI investments could indicate improved investor confidence in Indian markets.
Source
Business Standard
