FPIs return to G-Secs with Rs 8,000-cr buying

Mumbai: Foreign portfolio investors (FPIs) increased their investments in government securities under the Fully Accessible Route (FAR) by nearly Rs 8,000 crore in the first week of November, amid a strengthening rupee and easing bond yields.

FPI holdings in FAR government securities rose to Rs 3.65 lakh crore on November 9 from Rs 3.57 lakh crore on November 2, an increase of around Rs 7,969 crore, according to data compiled by PTI from the Clearing Corporation of India (CCIL).

During the same period, the rupee appreciated from 94.90 to 93.74 against the US dollar, while the yield on the 10-year benchmark government security eased to 7.178 per cent on Monday from 7.315 per cent on November 2.

The rupee's recovery was supported by softer crude oil prices, stronger foreign fund inflows and hopes of easing tensions in West Asia. Brent crude, which traded above $105 per barrel before the US mid-term election results, eased to $96.41 on Monday. An appreciating rupee improves dollar-denominated returns for overseas investors, while declining bond yields generate mark-to-market gains on their existing bond holdings, making Indian government securities more attractive.

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