FII: ₹14,000 Crore Spent in a Single Day as Fed Rate Cuts Ignite Buying Spree

Foreign investors (FIIs) made a huge splash in the Indian stock market last Friday, buying stocks worth ₹14,064 crore in a single day. This is the highest amount of buying in three years and the eighth highest in history. The previous peak was on May 6, 2020, when FIIs invested ₹17,123 crore.

The big reason behind this surge in buying is the recent 50 basis points rate cut by the US Federal Reserve, which many see as the start of a cycle of rate cuts. With bond yields in the US going down, foreign investors are looking to put their money into emerging markets like India.

So far in September, FIIs have invested ₹33,699 crore, making it the second-highest inflow this year after March. Overall, total FII investment in India for 2024 has reached ₹76,585 crore.

Despite uncertainties in the global market, experts say that India’s stable economy, controlled inflation, and good stock valuations make it an attractive place for investment. Manoj Purohit from BDO India highlighted these factors as reasons why foreign investors are interested in India.

The trend of FIIs buying is expected to continue. Banking stocks have become more appealing due to a recent decrease in the credit-deposit gap. This might lead to more buying in these stocks, which could help lift the overall market.

After meeting with investors in the US, Emkay Global’s Head of Research, Seshadri Sen, noted that many investors who were previously hesitant are now looking at India more positively. They believe that India will play a significant role in any rally in emerging markets triggered by the Fed’s easing of policies. While there are still concerns about high valuations, investors are recognizing India’s improved economic stability and strong earnings growth as positive signs. They are also open to exploring specific stocks rather than just focusing on index-based strategies.