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new DelhiOne hour ago
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In this financial year, FII has made net purchases of shares worth Rs 1.34 lakh crore so far.
- After the end of the presidential elections in the US and the weakness in the dollar index, there has been a huge increase in foreign investment.
- Foreign investment is also rising in the hope of getting relief from central banks to accelerate the epidemic-hit economy
Foreign investors are seeing increasing attraction in the Indian market amid the second wave of Coronavirus worldwide. Foreign Institutional Investors (FII) have invested in the Indian market on all other days in November, except Laxmi Pujan Day. Only on Lakshmi Pujan Day did he sell shares worth just 78.5 crores.
So far in November, he made net purchases of shares worth Rs 45,732 crore in Indian markets, the largest investment of any month in at least 2 decades. In this financial year, he has made net purchases of shares worth Rs 1.34 lakh crore so far. Especially after the end of the presidential election in the US and the weakness in the dollar index, there has been a huge increase in foreign investment.
Preparations for another relief package in America
A major reason for increasing foreign investment is that large central banks around the world can inject cash into the market on a large scale to accelerate the economy affected by the Coronavius epidemic. A second relief package may be announced in the US as well. However, this may take some time, as it is being negotiated between the Republicans and the Democratic parties.
Governments and central banks of developed countries have released relief packages worth 21 trillion dollars
Hemant Kanawala, head of equity segment at Kotak Mahindra Life Insurance Company, said that to deal with the impact of the coronavirus epidemic, governments and central banks in developed countries have issued relief packages worth $ 21 trillion. The US has issued a large part of these, so the dollar has weakened since April. Because of this, capital is coming out of America and emerging markets.
Foreign investment has also increased due to India’s attractive valuation.
He said that India’s attractive valuation vis-à-vis other emerging markets has resulted in large foreign investment in India since April. Relief programs may continue in developed countries even in 2021. This may lead to FII investment in emerging markets and India.
Indian economy showing signs of boom
There are signs of steady growth in the Indian economy. GDP may increase in the second half of this financial year. It is also believed that the rate of growth in the business year 2021-22 can remain in the double digits.