The stock market is not booming just like that, FPI bought stocks worth ₹ 27,856 crore in 15 days, know the reason

Amid the strength of the Indian market and rising expectations of interest rate cuts in the US, foreign portfolio investors (FPIs) have invested a net of Rs 27,856 crore in the local stock markets in the first fortnight of September. FPIs have been continuously buying in the Indian market since June. Earlier, in April-May, they had withdrawn Rs 34,252 crore from shares. Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that now everyone’s attention is on the meeting of the US central bank Federal Reserve.

The stance of FPI will be decided by the decision of the Fed

The outcome of the US Fed meeting will determine the trend of FPI investment in Indian shares. According to the depository data, FPI has made a net investment of Rs 27,856 crore in shares so far this month (till September 13). With this, FPI’s investment in shares so far this year has reached Rs 70,737 crore.

These are the reasons behind FPI buying

VK Vijayakumar, Chief Investment Strategist, at Geojit Financial Services, has cited two major reasons for the strong buying by FPIs. First, there is now a consensus that the US Federal Reserve will start a cycle of cutting interest rates this month. This will reduce the yield on bonds in the US. Apart from stocks, FPIs have invested Rs 7,525 crore in the debt or bond market through the voluntary retention route and Rs 14,805 crore in designated government debt securities under the fully accessible route (FAR) in the first two weeks of September.