Are Foreign Investors Coming Back to Indian Equities? - Chart Of The Day 25 March 2019 - Equitymaster

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Are Foreign Investors Coming Back to Indian Equities?
Mar 25, 2019

Foreign investors are back in the news.

The recent surge in the Indian stock markets can be attributed to the strong foreign investor inflows into Indian equities.

The chart reveals the monthly trend in foreign investor flows into Indian equities over the last five years. The period almost coincides with the term of the Modi government.

During this period, you can see that foreign investor participation in Indian equities shrank.

Over the last five years, foreign investors were net sellers in 24 months. Effectively, foreign investors were net sellers 40% of the time.

Now, here's something interesting...

After net outflows in the month of January 2019, foreign investors flows have shown a strong reversal since last month.

In February 2019, foreign investors were net buyers of Rs 15,328 crore worth of Indian equities.

The inflows have picked up further pace in March. As on 20 March 2019, foreign investors have already pumped in Rs 26,560 crore in Indian equities.

The chart shows that the highest monthly net foreign investor inflow over the last five years was recorded in March 2017 at Rs 33,782 crore.

If the money keeps pouring in for the rest of the month, the current month may break that record.

But should foreign investor participation be the factor guiding your investing decisions? I don't think so. Foreign investor flows are influenced by a myriad of global factors and are susceptible to change course anytime.

Data Source: CMIE

This Chart Of The Day was published in The 5 Minute WrapUp - These 5 Factors Are Favouring the Bulls Right Now

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