How has been the FPI activity in the month of December so far and do you see the flows continuing?

Foreign portfolio investors of FPIs continued to remain bullish on the Indian equity markets, even as the domestic investors were consistent sellers in equities due to the need for sectoral churning and also due to the consistent redemption pressures that Indian equity funds have been facing in the last few months.

In the first 3 weeks of the month, the FPIs infused Rs.54,980 crore into Indian markets overall as global liquidity continued to remain buoyant. Then there are hopes of the $900 billion US stimulus package likely to happen this week and that has also kept the Indian equity markets on the FPI radar.

If you break up the overall infusion into equity and debt, then FPIs infused Rs.48,858 crore into equities and Rs.6,122 crore into debt. What is more gratifying is the positive flows into debt because since the beginning of the year the FPIs have been consistent sellers in Indian bonds and although small, this is a consolation to flows.

It must be noted that this infusion in December comes on top of Rs.62,951 crore infused by FPIs into Indian markets in the month of Nov-20. Since the end of October, there has been a major risk-on trade that has diverted funds towards EMs. Vaccine hopes have also been a booster for the markets and the sooner it happens, the better it is for the markets.