NEW DELHI: July month has seen an unyielding influx of FPI (Foreign Portfolio Investment) flows into India. Among the emerging markets, India stands as the largest recipient of FPI flows year-to-date, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

As of July 21, FPIs have invested a substantial Rs 43,804 crore in India. This figure encompasses investments made through stock exchanges, the primary market, and bulk deals.

FPIs exhibit continued interest in financials, automobiles, capital goods, realty, and FMCG sectors. Their buying spree in these areas has significantly contributed to the surge in stock prices and has propelled both the Sensex and Nifty to reach record highs, as stated by Vijayakumar.

Nonetheless, there is growing concern about the escalating valuations. High valuations could trigger adverse effects leading to sharp corrections. This was evident when the Sensex experienced a significant drop of 887 points on Friday, owing to negative news from Infosys and HUL, as mentioned by Vijayakumar.

For the first time since April 2022, the US Dollar Index (DXY) has slipped below the $100 mark. A falling Dollar Index typically leads to an appreciation of the Indian Rupee and a weakening of the dollar, thereby increasing fund flow from FII (Foreign Institutional Investors) and FPIs, according to a report by SBI Securities.

The heavy inflow of funds provides a substantial boost to the market, remarked SBI Securities.

Notably, the India VIX (volatility index) concluded last week at 10.68, representing the lowest closing since December 2019. This decline in volatility indicates reduced fear in the market, as investors have embraced a risk-on approach, states the report.

Hence, the overall market structure looks very promising, with the formation of higher highs and higher lows evident on the chart, and a sense of stability prevailing in volatility.

The stability of volatility over time is advantageous, as it allows market participants to estimate potential gains and losses with greater accuracy.

ICICI Bank Records a Whopping 40% Surge in Standalone NP to Rs.9,648 cr

Jio Financial Services Valued at Rs. 261.85 in Reliance Demerger"