look news india
New Delhi: Foreign investors, who were engaged in a sell-off in April, returned to buying mode in May and continued to invest in securities including debt bonds. As the time for inclusion of Indian government bonds in the JP Morgan index is getting closer, foreign investors have also started increasing their investments in domestic bonds.
Net foreign portfolio investment (FPI) in debt securities so far in May is Rs. 7,427 crore. In April, these investors invested Rs. 11,218 crore and net sold Rs.
Market insiders said this is happening due to the inclusion of Indian bonds in the JP Morgan index. According to JP Morgan, the weightage of Indian bonds will increase by 1 per cent per month. JP Morgan announced in September 2023 that it will include government bonds issued by the Reserve Bank of India under the Fully Accessible Route (FAR) in its emerging markets global bond index.
The process of including bonds in the index will start from June 28 and will continue for 10 months. Under this, the weightage of bonds will be increased by 1 percent every month till March 31, 2025. The weightage of Indian bonds in the index will be 10 percent like China.
The benchmark 10-year government bond yield has fallen by 20 basis points so far in May. Foreign investors invested Rs 200 crore in the debt market in the fourth quarter of FY24. The investment was Rs 54,492 crore, which led to a decline of 14 basis points in the benchmark bond yield.
Debt markets were dominated by selling in April after foreign investment rose every month for nearly a year.
