(MENAFN- Khaleej Times) Foreign portfolio investors, or FPIs, continued to stay put in the Indian equities market for the week ended March 20 despite the anxiety regarding the United States Fedederal Reserve's stand on a rate hike possibility.
FPIs stayed invested in Indian markets despite other issues like the passage of key bills in parliament, concerns regarding the marginal increase in the retail inflation for February and the expected subdued March quarterly earning results.
However, the US Fed took a dovish stand and said that the rate hike might take place in the later part of the year.
This gave major relief to markets such as India where the downside of the meet was being seen as an immediate or a near-future rate hike announcement.
With higher interest rates in the US, FPIs are expected to be led away from emerging markets such as India.
"The long-term FPIs like pension funds and sovereigns understand the long-term value of staying invested in the Indian market. There is no market in the world where FPIs will get such an opportunity of growth and economic reforms process. After the dovish stand taken by the US Fed even the short-term investment-based hedge funds will find the Indian markets more attractive," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
"The Indian markets have come a long way since the June 2013 period of extreme volatility due to tapering. Our economic macros are quite positive which show future growth. Even the Reserve Bank is quite active as to avoid any repeat of the June 2013-type volatility," Nevgi added.
For the week ended March 20, FPIs bought stocks worth Rs1,952.36 crore ($312.46 million), according to data with National Securities Depository Limited.
However, foreign investors sold stocks worth Rs1,159.96 crore in the week under review.
During the previous week ended March 13, FPIs had bought stocks worth Rs3,234.7 crore. At that time they had off-loaded stocks worth Rs957.61 crore.
The triggers for FPIs in the coming week will be the concerns regarding the marginal increase in retail inflation for February, which belied expectations of a rate cut next month.
Meanwhile, Indian equities markets lost 242 points or 0.84 per cent during the weekly trade ended March 20.
The benchmark 30-scrip Sensitive Index (of the S&P Bombay Stock Exchange fell 242.22 points or 0.84 per cent.
The Sensex ended March 20 trade at 28,261.08 points. For the previous weekly trade, the BSE Sensex had closed at 28,503.30 points.
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