Foreign portfolio investors (FPIs) have for the first time invested more than $5 billion in Indian equities for three consecutive months, according to data from NSDL. In July 2023, FPIs deployed an average of $5.5 billion (46,617 crore) per month, bringing the three-month cumulative inflow to $16.7 billion (1.4 lakh crore), the highest level in 31 months.
In July, foreign portfolio investors invested $5.8 billion in Asia's third-largest economy, equating to a gross buy-to-sell ratio of 1.23 versus the long-term average of 1.07. In a note published on August 2, Morgan Stanley upgraded India's rating to 'Overweight' based on the country's jump from sixth place to first place since the last review in October 2022. India has been allocated the highest active overweight of 75 basis points by the American brokerage.
For the fifth consecutive month, foreign portfolio investors have been net purchasers of Indian equities, resulting in a total inflow of $19.1 billion (1.6 lakh crore). Consequently, the MSCI India index increased by 15.5% between March and July 2023, which is nearly double the return of the MSCI EM index. When FPI flows reverse commencing in March 2023, India is the second-best performing market among major economies, behind Brazil, in terms of dollars.
The MSCI World index's year-to-date return of 16.2% is the highest since 2009. Since the beginning of March 2023, Indian equities have contributed $0.6 trillion to the market capitalization, while the global market capitalization has increased by $8.9 trillion. India contributed approximately 7.2% to the increase in global market capitalization, while its proportion of the global total market capitalization was 3.4%.