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Indian rupee weakened substantially against dollars in the past 2-3 months.
FIIs continued selling in the bond market and this trend is likely to continue given the low yield differential between US and Indian bonds.
The Government securities (G-sec) continued to lose their shine for the foreign investors in June. Despite net buying in secondary and primary equity market in June, foreign investors kept selling the Indian government bonds in June, like previous two months, though with less intensity. The selling was driven by a weakening rupee, global risk-off sentiment, and the recent repo rate cut by the RBI.
As per ET report citing Clearing Corporation of India data, FPIs sold Rs 4,994 crore of sovereign papers under the fully accessible route (FAR) until June 27. The net sold for April and May were Rs 13,360 crore and Rs 13,165 crore, respectively.
Since June 2024, when Indian bonds were included in the JP Morgan Emerging Markets Index, FPIs have invested Rs 71,039 crore (about $8.5 billion) in government securities. JP Morgan analysts had projected that over the 10 months of the gradual inclusion of the securities in the index, the local bond market would attract $20-$25 billion in investments.
Indian rupee weakened substantially against dollars in the past 2-3 months. In between April and June, the rupee depreciated approximately Rs 1.725 to Rs 85.47 from Rs 83.75 against the USD. Brent crude prices surged triggered by Iran-Israel conflict.
The Foreign Institutional Investors (FIIs) turned net buyer for secondary and primary equity market in June in India triggered by a favourable investment scenario and weakening of the dollar. FII buy figure for June through June 27 stood at Rs 8,915 crore. FIIs were buyers in financials, capital goods and realty stocks and were sellers in FMCG, consumer durables and IT.
FIIs continued selling in the bond market and this trend is likely to continue given the low yield differential between US and Indian bonds, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
RBI in the latest MPC meeting cut the repo rate unexpectedly by 50 bps to 5.50 per cent from 6 per cent, but it changed the stance from “accommodative’ to ‘neutral’.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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