FPI Investment:Foreign portfolio investors (FPIs) have invested about Rs 33,700 crore in the Indian stock markets so far this month. The main reason for this is the reduction in interest rates in the US and the strength of the Indian market. Depository data shows that this is the second largest figure of FPI investment in Indian shares in a month so far this year. Earlier in March, FPIs had invested Rs 35,100 crore in the stock market.

What are the experts saying

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that the buying spree by FPIs is likely to continue in the coming days. According to depository data, foreign portfolio investors have made a net investment of Rs 33,691 crore in shares so far this month (till September 20). With this, their investment in shares so far this year has reached Rs 76,572 crore. FPIs have been buying continuously since June.

Earlier, in April-May, they had withdrawn an amount of Rs 34,252 crore from shares. FPIs are buying amid expectations of interest rate cuts by the US central bank Federal Reserve in September. After the Federal Reserve cut the key interest rate by 0.50 percent on September 18, FPIs have bought more aggressively. According to Robin Arya, Smallcase Manager, Founder and Chief Executive Officer (CEO) of analyst company Golfify, the weakness in the US dollar and the stance of the Federal Reserve have made the Indian stock market attractive for FPIs.

Manoj Purohit, Partner and Leader-FS Tax, Tax and Regulatory Services, BDO India, said that apart from this, emerging markets like India remain attractive for FPIs due to balanced fiscal deficit, impact of rate cuts on Indian currency, strong valuation and Reserve Bank of India's stance on controlling inflation. He said that apart from this, foreign funds are also positive towards the initial public offerings (IPOs) that came this year.

Apart from equities, FPIs have invested Rs 7,361 crore in the debt or bond market through the Voluntary Retention Route (VRR) and Rs 19,601 crore through the Fully Refundable Route (FRR) during the period under review. VRR encourages long-term investment while FRR enhances liquidity and access for foreign investors.