How was the trend of foreign portfolio investments in the previous week ending on 05 February?

FIIs or Foreign portfolio invested a total net amount of Rs.12,266 crore in the Indian markets during the first week of February that ended on 05 February. This was the crucial week that included the Union Budget and the Monetary Policy announcement. Out of the total inflows, Rs.10,793 crore went into equities and Rs.1473 crore went into debt instruments.

The equity flows, if you compare with the previous week before that, almost neutralize the outflows in the last week of January. The surge in inflows in the Budget was largely driven by the positive cues in the Union Budget. These include some of the bold and reformist moves in the Union Budget as well as the continuation of the accommodative stance in monetary policy.

Some of the bold reformist measures in the budget included acceding to a higher fiscal deficit, setting up of a Bad Bank, transparency in food subsidies by including it in the budget, thrust to privatization and monetization of state assets like roads, oil pipelines etc. These were all seen as positive for the markets. RBI has also supported with its monetary stance.