FPIS turn buyers in India
Mumbai: foreign portfolio investors (fpis) on wednesday turned buyers for the first time in September. FPIS had been on a sell mode despite the roll-back of the tax surcharge on them as macro-economic concerns took the centre stage.
On Wednesday, FPIS bought Rs 266.89 crore worth of stocks while Domestic Institutional Investors bought Rs1,132.42 crore worth. However, the outflow had steadily declined from Rs 2,016.20 crore at the start of the month, down to Rs188.08 crore on Sept.9.
India Ratings and Research earlier in the month said it expects headwinds to foreign portfolio investment flows into India to continue over the near-to-medium term despite the accommodative global monetary policy stance.
“A gamut of factors, such ass lower-than-expected demand growth in major economies, geopolitical and trade tensions and a gradual weakening of the economic growth prospects in India, have contributed to a build-up of risk aversion, which has impeded the demand for emerging market (EM) debt instruments,” the rating agency said.
Meanwhile the Kotak Equities on Wednesday estimated lending rates to soften following the 35 basis points (bps) decrease in the RBI repo rate last month and the drop in banks’ marginal cost of lending rates (MCLR).
The Kotak Equities report noted, however, that fresh lending rates remain broadly unchanged at 9.8 per cent despite downward revisions to the MCLR.
As per the Reserve Bank of India’s (RBI) release on system-wide lending and deposit rates, fresh lending rates remain broadly unchanged at 9.8 per cent despite downward revisions to the MCLR. Term deposit rates have declined 5 bps to 6.85 per cent, while the gap between outstanding loan and fresh loan rates was down 10 bps month-on-month (MOM) at 75 bps.