Foreign Institutional Investors pour in Rs 37,316 crore in Indian equity market, Sensex and Nifty indices surge in May

Foreign institutional investors (FIIs) have invested Rs 37,316 crore in the Indian equity market, marking a nine-month high for the month until May 26. This inflow of Rs 2,073.15 crore in 18 trading sessions has resulted in a 2.27% and 2.40% rise in the BSE Sensex and NSE Nifty indices, respectively, in May. The financial services sector witnessed the highest buying by FIIs, followed by automobiles, capital goods, healthcare, oil & gas, telecom, FMCG, and consumer durables. Market analysts attribute this buying trend to favourable macroeconomic data, such as GST collections, PMI data, and credit growth, which suggest a resilient economy that can deliver 6% GDP growth and mid-teen earnings growth in FY24. Furthermore, the CPI inflation rate of 4.7% in April and the Reserve Bank of India’s decision to keep the policy repo rate unchanged at 6.5% have also boosted market sentiment. Jefferies, a foreign brokerage, has predicted that India’s structural story is still intact, and it will only be a matter of time before the BSE benchmark Sensex reaches the 1,00,000 mark, assuming a 15% EPS growth on a five-year view and the maintenance of a five-year average one-year forward PE multiple of 19.8 times.