Dalal Street set to record highest monthly FPI flow this November

Mumbai: Indian equities are poised to receive the highest portfolio inflows in a month in November led by an increase in the country’s weighting on MSCI indices. While foreign portfolio investors (FPIs) have already pumped Rs 28,795 crore into stocks here so far in November, another Rs 30,000 crore is expected from overseas passive funds by the month-end as they buy stocks to align their holdings to the new MSCI index weights. The highest that overseas investors have pumped into Indian stocks in a month was Rs 45,727 crore in August 2020.MSCI will implement the long pending new regime on the foreign ownership limit (FOL) changes this month. The global index services provider has also included 12 Indian stocks to its standard index as part of its semi-annual review and dropped two stocks. With the proposed changes which will be applicable from November 30, India’s number of stocks in MSCI Standard Index will go up from 86 to 96.Global funds benchmark their scheme performances against indices of MSCI and FTSE. When these index providers increase or decrease their weight of a country’s stocks, these funds too follow suit. 79202348While JP Morgan expects an inflow of $5.1 billion as a result of the MSCI rejig, Morgan Stanley estimates over $2.5 billion in inflows. Motilal Oswal Financial Services estimated an inflow of Rs 17,000 crore (roughly $2.25 billion) at the end of this month for the 12 newly-added stocks.

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