2020-21 FII investment highest in 20 years |
Foreign Institutional Investors (FIIs) are the prominent investors in the Indian equity market. FIIs have invested more than $37 billion in the stock markets in fiscal 2020-21. As per data from National Securities Depository Ltd, it was the highest in the last two decades. In fiscal 2009-10, 2010-11, and 2012-13, FII inflows had crossed $20 billion. Investments in the markets zoomed as the Central bank in India pumped in trillions of dollars to try and revive Coronavirus-hit economies, creating a gush of liquidity. In the absence of domestic liquidity support, foreign investors have been driving the markets. Benchmark indices in India has surged more than 70% in this fiscal so far. In FY 2019-20, FII outflow was just $90.37 million. FPIs poured 3.03 billion Dollars into Indian equities in March taking their total inflows to $38 Billion. The 2020 December quarter flows of $20 Billion were in fact the highest ever in any quarter. Some of the factors that are attracting FIIs to India are hopes of strong economic recovery and earnings growth in the coming years, a weak dollar index, vaccine progress, and policy stimulus measures. With consistent FII inflows, benchmark indices BSE Sensex and Nifty50 gained more than 70% in FY 2020-21. The broader markets also participated in the run and outperformed frontline indices, with the Nifty Midcap and Smallcap indices climbing 101.73% and 124.87% respectively this fiscal.
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