How much did foreign portfolio investors finally invest into India in October 2920?

Here are some key takeaways for you from the F&O flows front in the month of November 2020.

· Foreign Portfolio investors of FPIs bought Rs.65,317 crore worth of Indian equities in November. This is the highest ever flow in a single month at any point of time in the history since 1992 when FPIs were first permitted into India.

· The contrast is visible because in the first seven months of the fiscal, the total FPI inflows into equities were just Rs.35,500 crore on a cumulative basis.

· The inflow in November 2020 year-to-date or YTD inflow of FPIs to Rs. 107,562 crore; 30% higher than the first 8 months of the corresponding fiscal last year.

· The first big reason for these FPI flows was the improving economic data points, which includes the Q2 GDP at -7.5 percent against record the record low of -23.9 percent in the first quarter of the year.

· In addition, two other factors also helped. Firstly, the improved bottom line performance with net profits up nearly 150% was a big boost to markets. Secondly, the Stimulus 3.0 also raised hopes of improved FDI into India.

· Of course, it is not just India because FPIs have been pumping money into all Emerging markets. The MSCI rerating of the Indian weight has also attracted close to $3 billion of monies into India.

An important factor has been the progress made on the vaccine front. In fact, as of today, 3 vaccine candidate viz. Pfizer, Moderna and Astra Zeneca showed strong results. The proximity of the vaccine also gives hope that the world can deal with a second pandemic.