In the last two sessions, Foreign Portfolio Investors (FPIs) are softening their cautious stance on the Indian equities market, becoming net buyers, after the announced cuts in the corporate tax rate. This comes after three months of aggressive selling by FPIs in the Indian equities market.
On Monday, FPIs invested Rs 11,058 crore and withdrew Rs 8,373 crore, a net buy of Rs 2,684 crore, only outpacing domestic institutional investors (DIIs), which were net buyers to the tune of Rs 291 crore. FPIs have withdrawn nearly Rs 33,700 crore from the secondary equity market since the beginning of July 2019 till September 12, but it has been more than made up by fresh investment by DIIs, who have been net buyers to the tune of around Rs 43,800 crore in the last three months, outpacing the sell-off by during the period.
On Friday Finance Minister Nirmala Sitharaman announced a cut in the basic corporate tax rate to 22 per cent from 30 per cent while for new manufacturing companies it is down to 15 per cent from 25 per cent. The move is expected to give a fillip to earnings of companies besides creating investment demand in the next six months.