FII Flows Turn Positive In August-21

Net FII investments showed an uptick of INR 16,560 crores in Aug 2021 vs -7409 crores in July 2021.

Insight: FII equity registered inflows in Aug-21 of INR 2082 crores after huge outflows in Jul-21 of INR -11,308 crores. The Nifty Index increased by 8.69% in Aug-21. Receding of the second wave of COVID-19 and easy access to vaccinations have improved investor sentiments. The strengthening of the dollar index and relatively better normalisation of economic activity in other EMs have had put outward pressure on Indian FII flows but now are recovering. On the debt front, the flows turned positive to the tune of INR 14,376 crores in Aug-21 highest since Oct-17 (INR 16,063 crores) as investors bet on lower yields. However, the sustainability of these flows will be keenly watched.

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