The overall FPI inflows should move into the range of $15-20 billion in fiscal 2017 with equity dominating with $10-15 billion and debt with $5 billion
Bajaj Auto was the top gainer in the Sensex pack, surging around 7 per cent, followed by Bajaj Finance, Bajaj Finserv, Kotak Bank, PowerGrid and Axis Bank. On the other hand, ONGC, HDFC, TCS and Reliance Industries were among the laggards.
Assume that the rupee will trend lower over the next 10 years as India increases overseas sovereign exposures, and your long-term asset allocation should be geared to deal with this trend, suggests Devangshu Datta
'If the Union Budget can provide incentives for animal spirits to come as well as induce demand stimulus and consumption, the Budget would have done a wonderful job.'
This could be attributed to the attractive valuation of the Indian equities after the sharp correction during the first quarter of calendar year 2020 and significant depreciation of the Indian rupee against USD, which provided them a rather good entry point.
The derivatives (futures and options) are not treated as capital asset and the income arising from the transfer of the derivatives is treated as business income and liable for normal rate of tax for domestic investors, an official statement said on Saturday, clarifying the stand of tax authorities on gains made from derivatives trading.
Dr Reddy's was the top loser in the Sensex pack, shedding around 5 per cent, followed by M&M, Tech Mahindra, Axis Bank, IndusInd Bank and TCS. NSE Nifty sank 306.05 points to finish at 14,675.70.
Over 25 per cent of the net flows have been directed toward the large-cap category as investors preferred to put money in the top 100 stocks by market capitalisation because the segment has been the most resilient over the past year.
M&M was the top gainer in the Sensex pack, soaring around 7 per cent, followed by Bajaj Finserv, Bharti Airtel, PowerGrid, Infosys and ICICI Bank. On the other hand, HUL, Kotak Bank, Bajaj Finance and ITC were among the laggards.
Given the concerns around trade wars that threaten to jeopardise global capital flows as well, attracting foreign capital needs to be a policy priority, says Neelkanth Mishra.
Highlights of Economic Survey 2020-21, tabled in Parliament by Finance Minister Nirmala Sitharaman on Friday.
The RBI has cut key rates to boost the economy.
Market regulator Securities and Exchange Board of India has said one FPI can hold a maximum of 10 per cent of a company's equity shares, while existing overseas investor classes such as foreign institutional investors, sub-accounts and qualified foreign investors need to convert to the new FPI regime eventually.
'Today, there is no easy money to be made after the run-up in equities.'
Global food prices rose by 1 per cent in March as compared to the previous month, driven mainly by an 11 per cent increase in dairy products.
Kotak Bank was the top loser in the Sensex pack, falling around 3 per cent, followed by Axis Bank, Sun Pharma, HDFC Bank, Bajaj Finance and Asian Paints. On the other hand, ONGC, PowerGrid and IndusInd Bank were the gainers.
The regulator typically meets overseas investors in the US and UK in the first half of a financial year, and had opted for a virtual meet last year too.
They have been on an unbroken selling streak since the Union Budget, spooked by increase in income-tax surcharge, taxes on buybacks, and lack of stimulus to prop up the economy.
While the amount collected is a tad lower than last two years, it may surpass the previous two years' collections by the end of the year.
While selling started in April, it has intensified this month, with FPIs pulling out $1.1 billion and $2.5 billion from equities and debt market, respectively
Market players say following the tax cuts, the market mood had changed from bearish to positive, which should help sustain the rally.
A falling rupee and lower foreign buying in equities are signals investors should watch out for, says Devangshu Datta
Equity markets braved all odds this fiscal and rewarded investors with high returns as the benchmark Sensex surged more than 66 per cent despite COVID-led disruptions and concerns over its impact on the economy. Market analysts termed FY 2020-21 as a roller coaster ride for not only Indian markets but also for equity indices globally due to the pandemic. In an unprecedented come back, the 30-share BSE Sensex has jumped 19,540.01 points or 66.30 per cent so far this fiscal. This extraordinary rally holds significance as markets faced volatile trends this fiscal.
Companies in the small-cap universe are having a dream run - the Nifty Smallcap 100 index has shot up more than 25 per cent on a year-to-date basis, even as the benchmark Nifty is up 7 per cent. This is the best start for the index since 2017 when the Nifty Smallcap 100 index surged 32.3 per cent between January 1 and May 10. However, in terms of outperformance to the Nifty, this year's performance is the best in more than a decade. A combination of sectoral tailwinds and lack of institutional selling pressure has helped small companies escape from the correction triggered by the second wave of Covid-19.
To get same tax treatment as FIIs; rules on search & seizure and consent settlement cleared
'The Indian economy is in slowdown and growth may stay slow,' notes Devangshu Datta.
The move will increase working capital requirement for brokers, raise the work load on the system and will leave little room for contingencies.
FPIs' ownership in NSE-listed companies reached a five-year high of 22.74 per cent in December 2020 on the back of huge net inflow of Rs 1.42 lakh crore by such investors in the third quarter.
The coming Union Budget might give relief to foreign portfolio investors from taxation on indirect transfers.
The Budget has relaxed a few safe harbour rules that aim to make it easier for fund managers overseeing offshore India-focused funds to relocate to the country.
Besides, the quantum of FPI investments via P-notes dropped to 3.5 per cent during the period under review from 3.8 per cent in the preceding month.
The investors had pumped in a net sum of Rs 2,965.66 crore on February 11, the second-highest single-day inflow so far this month.
'There is a weak link between the economy and the stock market.'
If net forex outflows turn out to be relatively high in the next few years, the rupee could depreciate beyond Rs 80 to a dollar by 2022. The causal reasons could, for example, include unmet expectations of FPI and FDI investors about the performance of the Indian economy, sharp rise in prices of imported oil and decrease in FX remittances. The RBI has to ask itself whether guaranteeing future rupee-dollar exchange rates on FX forward contracts is a reasonable way to use its risk-bearing capacity, says Jaimini Bhagwati.
The new PN3 norms and lack of clarity on what constitutes beneficial ownership are the primary reasons for the decline in investments from China and Hong Kong.
The quantum of FPI investments via P-notes remain unchanged at 6.6 per cent in March.
Experts say foreign investor sentiment was bolstered by the US Federal Reserve's decision to go slow with interest rate hikes and hopes of political stability.
Swiss brokerage UBS joins European banking peer HSBC in shutting down its offshore derivative business
It does feel like we are close to the end of the rupee's rally, says Jamal Mecklai.
A key trigger for the increased retail participation in equities has been the lockdown triggered by Covid-19 that saw investors channelising their savings to capital markets in search of better return on their investments and the need to increase their disposable income.
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