New Delhi : Foreign investors poured in over Rs 24,500 crore in Indian capital markets last month and analysts expect the inflows to rise after the Union Budget sought to address concerns on controversial issues like GAAR and retrospective taxation.
The BSE Sensex ended at 29,361.50, logging a gain of 141.38 points or 0.48% on a special trading session after the Union Budget on Saturday. Inflows during February have taken take the total foreign investment in capital markets to Rs 58,252 crore ($9.42 billion) since the beginning of 2015. In January, overseas investors had pumped in Rs 33,688 crore in Indian debt and equities.
Foreign portfolio investors (FPIs) bought shares worth Rs 11,475 crore in February, while in the debt segment, they invested funds to the tune of Rs 13,088 crore, taking the total investment to Rs 24,563 crore, as per data compiled by the National Securities Depository Ltd (NSDL).
“We are bullish on domestic oriented sectors like automobiles, cement, capital goods, and banks. Defensive sectors like FMCG, pharma and IT could perform in line with broader markets. We maintain our December 2015 Sensex and Nifty target of 32,500 and 9,750, respectively,” said ICICI Securities.
To soothe investors’ nerves, Finance Minister Arun Jaitley deferred the controversial General Anti-Avoidance Act (GAAR) by two years, saying its immediate applicability can create ‘panic’ in markets.
Religare Enterprises’ Chairman and MD Sunil Godhwani said that the deferment of GAAR rules will improve business confidence in India and help attract global fund flows. Reliance Mutual Fund CEO Sundeep Sikka also said that deferment of GAAR was a major positive move for foreign investors and overall investor sentiment.
With the Union Budget event out of the way, markets are likely to look forward to monetary policy easing measures and corporate developments.
“Markets are expected to remain volatile as the budget announced was at par with the expectations of D-street and thus market has already discounted the noise going on in the market,” said Rohit Gadia, Founder & CEO, CapitalVia Global Research.
