The Reserve Bank of India on Thursday raised the overall limit for overseas investment by domestic mutual funds from $5 billion to $7 billion. Industry estimates peg the amount invested overseas at $1 bn to $2 billion. Only last September, RBI had raised the overseas investment limit for mutual funds from $4 bn to $5 bn. RBI said the overall ceiling for investment in overseas exchange-traded funds will continue to be at $1 bn. There are about 17 schemes that invest overseas.
Investors accumulated quality stocks at valuable and attractive levels.
Participatory Notes (P-Notes) are derivative instruments issued by FIIs to foreign investors -- individuals or corporates -- who want exposure to Indian equities, but do not want to register with Sebi.
Benchmark stock indices Sensex and Nifty tumbled nearly 1 per cent on Wednesday due to profit booking in banking, financial and IT stocks after a recent rally. The 30-share BSE Sensex plunged 537.22 points or 0.94 per cent to end at 56,819.39 as 24 of its stocks declined. During the day, it tanked 772.57 points or 1.34 per cent to touch a low of 56,584.04. The broader NSE Nifty declined by 162.40 points or 0.94 per cent to 17,038.40 with 39 of its constituents ending in the red. Bajaj Finance was the biggest loser among Sensex stocks, dropping by 7.24 per cent.
The broader NSE Nifty closed 1.25 points, or 0.01 per cent down at 10,564.05.
Strong MF investments, stemming of FII outflows and positive earnings in Q3 have helped market, say analysts.
Flow surge in equity schemes is an important reason why Indian stock market did not crash.
While three of the top five FPIs - Capital, Government of Singapore, and Vanguard - have seen their investment value more than triple, India's benchmark indices have risen just 70%.
'Indian macro conditions have never been better, and many businesses will safely compound earnings over the next five years.'
The deficit increased to $ 57.2 billion or 2.1 per cent of gross domestic product (GDP) in 2018-19 as against 1.8 per cent in the previous year.
'Life will not improve overnight; it will happen in a gradual manner.'
Higher interest rates in the US do not necessarily coincide with capital outflows.
'There will be massive differences in sectors and stocks over the next few years.'
In the entire 2017, FPIs put in a collective amount of Rs 2 trillion in equity and debt markets
Recently, Prime Minister Manmohan Singh had also ruled out the possibility of India witnessing a repeat of the 1991 balance of payments crisis and reversing the path to globalisation of economy.
Abu Anas was arrested by the NIA in January for allegedly planning to carry out a terror strike ahead of Republic Day.
The branch managers have come out of their glass cabins and the sellers' market has transformed into a buyers' market, but there is no end to the harassment of customers, asserts Tamal Bandyopadhyay.
2013 foreign currency non-resident deposits to mature in Sep-Nov
Slowdown in the global economy and bearish market conditions are impacting inflow of funds from foreign institutional investors even as the current account deficit during the first quarter of 2008-09 soared to $10.7 billion, says a report by the Reserve Bank of India.
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.
Non-performing loans in the Chinese banking system stood at RMB 1.27 trillion at the end of 2015.
The balance sheet of the Reserve Bank plays a critical role in the functioning of the country's economy.
While FIIs have pumped in nearly Rs 17,000 crore, MFs have been net buyers to the tune of Rs 9,000 crore.
OIL, IOC, HPCL, BPCL slipped between 0.1-1.5% each while the oil producing companies such as ONGC (0.1%), RIL (1.5%), GAIL(2.6%) also edged lower.
The Rupee is likely to recover during day trad, say currency watchers.
The BSE Sensex moved up 103 points to 35,319.35, while the wider NSE Nifty finished at 10,741.70, up 23.90 points.
The Reserve Bank in its first mid-quarter policy review on Monday kept the key interest rates unchanged because of elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.
The new norms provide an operational framework for FPIs, a new class of overseas investors that club all existing class of investors like foreign institutional investors and Qualified Foreign Investors.
'India's sizeable foreign exchange reserves should serve as a buffer.'
Till now borrowings in the form of ECB were not permitted to be utilised for general corporate purpose.
'The variables to watch include the monsoon, resolution of NBFC liquidity issues, GST collections, and NPA resolution.'
SIPs keep MFs afloat as investors redeem Rs 1.3 lakh crore in one year
Rising rural distress due to back-to-back droughts have put pressure on FM to spend more on social schemes; no change in tax slabs likely
The Budget has to provide for capex on roads, railways, defence and other infrastructure sectors.
The rupee had weakened by 23 paise to end at 63.51 against the American currency on Wednesday on month-end dollar demand from oil companies and persisting selling by foreign funds in stocks.
India remains one of the most over-owned market in Asia.
India was less directly affected by the Chinese stock market rout and yuan devaluation that battered currencies and markets in the region.
With banks staying out of the bond market, and foreign investors exhausting their investment limit, the question is: Who will buy the Rs 4.6 trillion bonds that will be issued from April.
High interest costs and a weak rupee may raise overall debt, even as refinancing may not be an issue.
