By Admin 
Iran-Israel War Impact on FIIs Buying: In the month of February, foreign institutional investors (FIIs) made huge purchases in the Indian stock market. During this period he bought Indian shares worth Rs 22615 crore. This is the first time in the last 17 months that foreign investors made such a huge investment in the domestic stock market in a single month. However, due to heavy selling in the last two trading sessions of February and increasing tensions amid the war between Iran and Israel, question marks have arisen about the reversal of this positive trend.
Experts believe that in view of the tension in the Middle East, foreign investors have become cautious because amidst this geopolitical tension, a risk-off situation has arisen in the financial market. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that now it remains to be seen how this fight will progress and what effect it will have on the crude and currency markets. FIIs will wait for the situation to calm down before making any further investments in emerging markets and see how things change further.
FIIs can turn to safe investments
Generally, in an environment of stress, investors move money from risky assets (equities) to considered safe havens like gold and US bonds. According to the ET report, Nachiketa Savarikar, fund manager of Earth Bharat Global Multiplier Fund, also has something similar to say.
“Trading activity appears to be increasingly tilted towards US securities, with a parallel shift in flows towards bullion, indicating the potential for capital outflows from emerging markets,” he said. The expert further said, “We expect the ongoing rally in USA Treasury, oil, gold and silver to continue.”
Will the Indian stock market be able to recover?
If foreign investors sell, the stock market may get support from domestic investors. On Friday, foreign investors sold shares worth Rs 7500 crore, while domestic institutional investors bought shares worth more than Rs 12000 crore. This provided support to the market to a great extent.
Its GDP growth rate for India is 7.8 percent. That means India’s economy has grown at the rate of 7.8 percent compared to last year. This figure gives confidence to the investors that the profits of the companies will increase because when the economy grows at this pace, it means that the companies are doing good work, production is getting better, people are getting employment. If the total income of the country increases with the increase in GDP, then the average earning or per capita income of the people also improves. Foreign investors also like to invest money in those countries where GDP growth is good.
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